HomeMy Public PortalAbout06 Notes to Financial StatementsCOMPREHENSIVE
ANNUAL
FINANCIAL REPORT
CITY OF RANCHO MIRAGE, CALIFORNIA
I
Note
CITY OF RANCHO MIRAGE
Notes to Basic Financial Statements
(in order of presentation)
June 30, 2009
Descrintion Page Number
1 Reporting Entity and Summary of Significant Accounting Policies 24
2 Cash and Investments 42
3 Due From and Due to Other Funds 48
4 Interfund Transfers 49
5 Capital Assets 51
6 Long -term Liabilities 53
7 Pledged Revenues 85
8 Debt Without Governmental Commitment 86
9 Participation in Risk Pool 86
10 Required Disclosures 88
11 Defined Benefit Pension Plan 88
12 Other Post Employment Benefits 90
13 Deferred Compensation Plan 93
14 Contingencies 93
15 Restatement of Fund Balance/Net Assets 94
23
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
Year ended June 30, 2009
(11 Reporting Entity and Summary of Significant Accounting Policies
(a) Summary of Significant Accounting Policies
The basic financial statements of the City of Rancho Mirage have been prepared
in conformity with generally accepted accounting principles as applicable to
government units. The Governmental Accounting Standards Board (GASB) is the
accepted standard- setting body for establishing governmental accounting and
financial reporting principles.
The Financial Reporting Entity
The City of Rancho Mirage was incorporated August 3, 1973 as a general law city
under the government code of the State of California. Effective December 25,
1997, the City of Rancho Mirage became a Charter City which was approved by
the citizens of the City of Rancho Mirage. The City operates under a council
manager form of government and the City Council is composed of five members.
Among the services provided by the City are the following: public works, parks
and recreation, library, planning, building and safety, code compliance, and
contracted fire and law enforcement services.
As required by generally accepted accounting principles, these financial
statements present the government and its component units, entities for which the
government is considered to be financially accountable. The City is considered to
be financially accountable for an organization if the City appoints a voting
majority of that organization's governing body and the City is either able to
impose its will on that organization or there is a potential for that organization to
provide specific financial benefits to or impose specific financial burdens on the
City The City is also considered to be financially accountable if an organization
is fiscally dependent upon the City (i.e., it is unable to adopt its budget, levy taxes,
set rates or charges, or issue bonded debt without approval from the City). In
certain cases, other organizations are included as component units if the nature
and significance of their relationship with the City are such that their exclusion
would cause the City's financial statements to be misleading or incomplete.
All of the City's component units are considered to be blended component units.
Blended component units, although legally separate entities, are in substance, part
of the government's operations and so data from these units are reported with the
interfund data of the primary government. The following organizations are
considered to be component units of the City
24
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
(a) Summary of Significant Accounting Policies. (Continued)
The Financial Reporting Entity (Continued)
Rancho Mirage Redevelopment Agency
The Rancho Mirage Redevelopment Agency was established on October 7, 1976
pursuant to the State of California Health and Safety Code Section 33000 entitled
"Community Redevelopment Law" Its purpose is to prepare and carry out plans
for improvement, rehabilitation and redevelopment of blighted areas within the
territorial limits of the City of Rancho Mirage. Even though it is legally separate,
it is reported as if it were part of the City because the City Council also serves as
the governing board of the Agency Upon completion, separate financial
statements of the Agency are available at City Hall, 69 -825 Highway 111, Rancho
Mirage, California 92270.
Rancho Mirage Joint Powers Financing Authority
The Rancho Mirage Joint Powers Financing Authority was established pursuant to
a Joint Exercise of Powers Agreement dated December 1, 1989, between the City
and the Rancho Mirage Redevelopment Agency (the "Members The Authority
was created for the purpose of providing financing for public capital
improvements for the Members. Even though it is legally separate, it is reported
as if it were part of the City because the City Council also serves as the governing
board of the Authority Separate financial statements of the Financing Authority
are not issued.
Rancho Mirage Housing Authority
The Housing Authority was created to promote and encourage the retention,
rehabilitation and development of "affordable" housing units. "Affordable"
housing units are those units occupied by households not exceeding the
"affordable" income limits as established by the Department of Housing and
Urban Development "HUD Income limits are revised on a yearly basis. Even
though the Housing Authority is legally separate, it is reported as if it were part of
the City because the City Council also serves as the governing board. Separate
financial statements of the Housing Authority are not issued.
25
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
(a) Summary of Significant Accounting Policies. (Continued)
The Financial Reporting Entity (Continued)
Community Services District
The CSD was officially established on July 15, 1999 The CSD was created to
collect property taxes for the Library and Fire Tax Funds. Contributions made by
the Redevelopment Agency to the Library Fund are first received by the CSD A
transfer of these revenues is then made by the CSD to the Library and Fire Tax
Funds for their respective operations. Even though the CSD is a legally separate
entity, it is reported as if it were part of the City because the City Council also
serves as the governing board. Separate financial statements are not prepared for
the CSD
(b) Basis of Accounting and Measurement Focus
The basic financial statements of the City are composed of the following:
Government -wide financial statements
Fund financial statements
Notes to basic financial statements
Financial reporting is based upon all GASB pronouncements.
Government -wide Financial Statements
Government -wide financial statements display information about the reporting
government as a whole, except for its fiduciary activities. These statements
include separate columns for the governmental activities of the primary
government (including its blended component units) Eliminations have been
made in the Statement of Activities so that certain allocated expenses are recorded
only once (by the function to which they were allocated). However, general
government expenses have not been allocated as indirect expenses to the various
functions of the City
26
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
Government -wide Financial Statements. (Continued)
Government -wide financial statements are presented using the economic
resources measurement focus and the accrual basis of accounting Under the
economic resources measurement focus, all (both current and long -term)
economic resources and obligations of the reporting government are reported in
the government -wide financial statements. Basis of accounting refers to when
revenues and expenses are recognized in the accounts and reported in the financial
statements. Under the accrual basis of accounting, revenues, expenses, gains,
losses, assets, and liabilities resulting from exchange and exchange -like
transactions are recognized when the exchange takes place. Revenues, expenses,
gains, losses, assets, and liabilities resulting from non exchange transaction are
recognized in accordance with the government -wide requirements of GASB
Statement No. 33.
Program revenues include charges for services, special assessments, and payments
made by parties outside of the reporting government's citizenry if that money is
restricted to a particular program. Program revenues are netted with program
expenses in the statement of activities to present the net cost of each program.
Amounts paid to acquire capital assets are capitalized as assets in the government
wide financial statements, rather than reported as an expenditure. Proceeds of
long -term debt are recorded as a liability in the government -wide financial
statements, rather than as an other financing source. Amounts paid to reduce long-
term indebtedness of the reporting government are reported as a reduction of the
related liability, rather than as an expenditure.
Fund Financial Statements
The underlying accounting system of the City is organized and operated on the
basis of separate funds, each of which is considered to be a separate accounting
entity The operations of each fund are accounted for with a separate set of self
balancing accounts that comprise its assets, liabilities, fund equity, revenues and
expenditures. Governmental resources are allocated to and accounted for in
individual funds based upon the purposes for which they are to be spent and the
means by which spending activities are controlled.
Fund financial statements for the primary government's governmental, and
fiduciary funds are presented after the government -wide financial statements.
These statements display information about major funds individually and non
major funds in the aggregate for governmental funds. Fiduciary statements include
financial information for fiduciary funds and similar component units. Fiduciary
funds of the City primarily represent assets held by the City in a custodial capacity
for other individuals or organizations.
27
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(11 Reporting Entity and Summary of Significant Accounting Policies. (Continued)
Governmental Funds
In the fund financial statements, governmental funds are presented using the
modified accrual basis of accounting Their revenues are recognized when they
become measurable and available as net current assets. Measurable means that
the amounts can be estimated, or otherwise determined. Available means that the
amounts were collected during the reporting period or soon enough thereafter to
be available to finance the expenditures accrued for the reporting period. The City
uses an availability period of 60 days.
Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle in lieu,
transient occupancy taxes, grants and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized
as revenues of the current fiscal period to the extent normally collected within the
availability period. Other revenue items are considered to be measurable and
available where cash is received by the government.
Revenue recognition is subject to the measurable and availability criteria for the
governmental funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., the related
goods or services are provided). Locally imposed derived tax revenues are
recognized as revenues in the period in which the underlying exchange transaction
upon which they are based takes place. Imposed non exchange transactions are
recognized as revenues in the period for which they were imposed. If the period of
use is not specified, they are recognized as revenues when an enforceable legal
claim to the revenues arises or when they are received, whichever occurs first.
Government mandated and voluntary non exchange transactions are recognized
as revenues when all applicable eligibility requirements have been met.
In the fund financial statements, governmental funds are presented using the
current financial resources measurement focus. This means that only current
assets and current liabilities are generally included on their balance sheets. The
reported fund balance (net current assets) is considered to be a measure of
"available spendable resources." Governmental fund operating statements present
increases (revenues and other financing sources) and decreases (expenditures and
other financing uses) in net current assets. Accordingly, they are said to present a
summary of sources and uses of "available spendable resources" during a period.
Non current portions of long -term receivables due to governmental funds are
reported on their balance sheets in spite of their spending measurement focus.
Special reporting treatments are used to indicate, however, that they should not be
considered "available spendable resources," since they do not represent net
current assets.
28
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
Recognition of governmental fund type revenue represented by non current
receivables are deferred until they become current receivables. Non- current
portions of other long -term receivables are offset by fund balance reserve
accounts.
Due to their nature of their spending measurement focus, expenditure recognition
for governmental fund types excludes amounts represented by non current
liabilities. Since they do not affect net current assets, such long -term amounts are
not recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the
year that resources were expended, rather than as fund assets. The proceeds of
long -term debt are recorded as an other financing sources rather than as a fund
liability Amounts paid to reduce long -term indebtedness are reported as fund
expenditures.
When both restricted and unrestricted resources are combined in a fund, expenses
are considered to be paid first from restricted resources, and then from
unrestricted resources.
Fiduciary Funds
The City's Agency funds are used to account for refundable customer deposits and
assessment collections and debt service payments of assessment districts whose
debt is not an obligation of the City
Agency funds are custodial in nature (assets equal liabilities) and do not involve
the recording of City revenues and expenses.
(c) Fund Classifications
The City reports the following major governmental funds and judiciary funds:
General Fund. The General Fund is the general operating fund of the City All
general tax revenues and other receipts that are not allocated by law or contractual
agreement to some other fund are accounted for in this fund. From this fund are
paid the general operating expenditures and capital improvement costs which are
not paid through other funds.
Library Special Revenue Fund. The Library Fund is used to account for
revenues and expenditures associated with the provision of public library services.
29
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STA'1
(Continued)
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
Fire Tax Special Revenue Fund. The Fire Tax Fund is used to account for the
revenues and expenditures associated with the provisions of fire protection
services.
Housing Authority Special Revenue Fund. The Housing Authority Fund is
used to account for monies set aside for assistance to low and moderate income
households.
Low Cost Housing Special Revenue Fund. The Low Cost Housing Fund is
used to account for monies set aside for assistance to low and moderate income
households before the monies are transferred to the Housing Authority Fund.
Whitewater Project Area Debt Service Fund. The Whitewater Project Area
Fund is used to account for tax increment revenues and debt service transactions
of bonds and other obligations of the Whitewater redevelopment project area.
Northside Project Area Debt Service Fund. The Northside Project Area Fund
is used to account for the tax increment revenues and debt service transactions of
bonds and other obligations of the Northside redevelopment project area.
Whitewater Project Area Capital Projects Fund. The Whitewater Project Area
Fund is used to account for proceeds of tax allocation bonds and other obligations
issued to fund construction of specific improvements in the Whitewater
redevelopment project area.
Northside Project Area Capital Projects Fund. The Northside Project Area
Fund is used to account for proceeds proceeds of tax allocation bonds and other
obligations issued to fund construction of specific improvements in the Northside
redevelopment project area.
Agency Funds. The Agency Funds are used to account for assets held by the City
as an agent for individuals, private organizations, other governments, and /or other
funds. Agency Funds are custodial in nature (assets equal liabilities) and do not
involve measurement of results of operation.
(d) Explanation of Differences between Governmental Funds Balance Sheet and the
Statement of Net Assets
The "total fund balances" of the City's governmental funds differs from "net
assets" of governmental activities reported in the statement of net assets. This
difference primarily results from the long -term economic focus of the statement of
net assets versus the current financial resources focus of the governmental fund
balance sheets.
30
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(1) Renortina Entity and Summary of Significant Accounting Policies. (Continued)
Canital Related Items
When capital assets (property, plant, equipment) that are to be used in
governmental activities are purchased or constructed the cost of those assets are
reported as expenditures in governmental funds. However, the statement of net
assets includes those capital assets among the assets of the City as a whole.
Cost of capital assets
Accumulated depreciation
Lona -term Debt Transactions
Long -term liabilities applicable to the City's governmental activities are not due
and payable in the current period and accordingly are not reported as fund
liabilities. All liabilities (both current and long -term) are reported in the statement
of net assets.
Tax allocation bonds payable $169,690,462
Revenue bonds payable 5,310,000
ACBI "Pay Back Deficit" 92,287
Compensated absences payable 1,538,078
Claims payable 444.587
Accrued Interest
Accrued liabilities in the statement of net assets differs from the amount reported
in governmental funds due to accrued interest on Tax Allocation Bonds payable.
Accrued interest payable $2.043.039
Reclassifications and Eliminations
Interfund balances must generally be eliminated in the government -wide
statements, except for net residual amounts due between governmental activities.
Amounts involving fiduciary funds should be reported as external transactions.
Any allocations must reduce the expenses of the function from which the
expenses are being allocated, so that expenses are reported only once in the
function in which they are allocated.
31
$217,297,206
(53,468,549)
$177.075.414
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(11 Reporting Entity and Summary of Significant Accounting Policies. (Continued)
(d) Explanation of Differences between Governmental Funds
Balance Sheet and the Statement of Net Assets. (Continued)
Assets:
Cash and investments 135,611,634
Cash and investments with fiscal agent 82,670,114
Receivables:
Interest 91,836
Accounts 801,800
Special assessments 546,511
Loans 2 227 318
Trusts 9,890
Due from other governments 2,180,208
Due from other funds 1,301,176
Prepaid items 32,157
Capital assets
Accumulated depreciation
Total assets and other debits
Liabilities and fund balances
Liabilities:
Accounts payable 9,850,890
Accrued salaries and benefits 197,295
Accrued interest payable
Due to other governments 2,072,465
Due to other funds 1,301,176
Deposits payable 176,028
Deferred revenue 101,390
Long -term liabilities
Total
Governmental Capital Accumulated
Funds Assets Depreciation
32
217,297,206
(53,468,549)
225,472,644 217,297,206 (53,468,549)
Total liabilities 13,699,244
Fund balances /net assets 211,773,400 217,297,206 (53,468,549)
Total liabilities and fund
balances /net assets 225,472,644 217,297,206 (53,468,549)
Long -term Certain Reclassifications Statement
Debt Interest Compensated Deferred and of
Transactions Payable Absences Revenue Eliminations Net Assets
2,043,039
33
135,611,634
82,670,114
91,836
801,800
546,511
2,227,318
9,890
2,180,208
(1,301,176)
32,157
217,297,206
(53,468,549)
(1,301,176) 388,000,125
9,850,890
197,295
2,043,039
2,072,465
(1,301,176)
176,028
101,390
175,537,336 1,538,078 177,075,414
175,537,336 2,043,039 1,538,078 (1,301,176) 191,516,521
(175,537,336) (2,043,039) (1,538,078) 196,483,604
(1,301,176) 388,000,125
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
(e) Explanation of Differences between Governmental Fund Operating Statements
and the Statement of Activities
The "net change in fund balances" for governmental funds differs from the
"change in net assets" for governmental activities reported in the statement of
activities. The differences arise primarily from the long -term economic focus of
the statement of activities versus the current financial resources focus of the
governmental funds. The effect of the differences is illustrated below
Capital Related Items
When capital assets that are to be used in governmental activities are purchased or
constructed, the resources expended for those assets are reported as expenditures
in governmental funds. However, in the statement of activities, the cost of those
assets is allocated over their estimated useful lives and reported as depreciation
expense. As a result, fund balance decreases by the amount of financial resources
expended, whereas net assets decreased by the amount of depreciation expense
charged for the year.
Capital outlay $9,526,866
Depreciation expense (4,932,817)
Long -term Debt Transactions
Some expenses reported in the statement of activities do not require the use of
current financial resources and therefore are not reported as expenditures in
governmental funds.
Net changes in compensated absences 172,949
Net change in claims payable 151,473
Repayment of bond principal is reported as an expenditure in governmental funds
and, thus, has the effect of reducing fund balance because current financial
resources have been used. For the City as a whole, however, the principal
payments reduce the liabilities in the statement of net assets and do not result in
an expense in the statement of activities.
TAB principal payments $5,370,000
Revenue bond principal payments 160.000
34
5g5.530..000
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
Proceeds from long -term debt is another financing source in the governmental
funds, but the new debt issuance increases long -term liabilities in the statement of
net asset and is not recorded in the statement of activities.
Issuance of long -term debt $22.040.000
Accrued Interest
Beginning fund balance in the statement of activities has been restated to reflect
the retroactive recording of accrued interest on bonds payable.
Net change in accrued interest S214.832
Reclassification and Eliminations
Interfund balances must generally be eliminated in the government -wide financial
statements, except for net residual amounts due between governmental activities.
Amounts involving fiduciary funds should be reported as external transactions.
Any allocations must reduce the expenses of the function from which the
expenses are being allocated, so that expenses are reported only once in the
function in which they are allocated.
35
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
(el Explanation of Differences between Governmental Funds
Operating Statements and the Statement of Activities. (Continued)
Total
Governmental Capital Accumulated
Funds Assets Depreciation
Revenues:
Taxes 53,383,125
Intergovernmental 3,559,677
Licenses and permits 486,475
Charges for services 1,024,703
Fines and forfeitures 183,012
Special assessments 5,106,451
Developer fees 228,596
Interest income 8,055,417
Net increase (decrease)
in investment fair value 2,449,650
Miscellaneous 1,998,920
Total revenues 76,476,026
Expenditures:
Current:
General government 21,512,236 759,096
Public safety 10,307,877 133,958
Public works 4,751,113 5,485,306 3,125,689
Cultural and recreation 3,835,191 446,528
Capital projects 14,544,626 (14,544,626)
Debt service:
Principal 5,530,000
Interest 8,016,544
Payments under pass through agreements 15,119,233
Service fees 950,175
Total expenditures 84,566,995 (9,059,320) 4,465,271
Excess (deficiency) of revenues over
expenditures (8,090,969) 9,059,320 (4,465,271)
Other financing sources (uses):
Transfers in 32,839,537
Transfers out (32,839,537)
Original discount on issuance of debt (312,870)
Issuance of long -term debt 22,040,000
Total other financing sources (uses) 21,727,130
Total change in fund balances /net assets 13,636,161 9,059,320 (4,465,271)
Fund balances /net assets, beginning of year 198,137,239 208,237,886 (49,003,278)
Fund balances /net assets, end of year 211,773,400 217,297,206 (53,468,549)
36
Long -term Certain Reclassifications Statement
Debt Interest Compensated Deferred and of
Transactions Expense Absences Revenue Eliminations Net Assets
151,473
(5,530,000)
(15,119,233) 38,263,892
3,559,677
486,475
1,024,703
183,012
5,106,451
228,596
8,055,417
(15,119,233) 61,356,793
96,091 22,518,896
4,700 10,446,535
31,270 13,393,378
40,889 4,322,608
270,106 214,832 8,501,482
(15,119,233)
950,175
(5,108,421) 214,832 172,950 (15,119,233) 60,133,074
5,108,421 (214,832) (172,950) 1,223,719
37
(32,839,537)
32,839,537
2,449,650
1,998,920
(312,870)
(22,040,000)
(22,040,000) (312,870)
(16,931,579) (214,832) (172,950) 910,849
(158,605,757) (1,828,207) (1,365,128) 195,572,755
(175,537,336) (2,043,039) (1,538,078) 196,483,604
(f)
(g)
Capital Assets
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
Cash and Investments
Investments are reported in the accompanying balance sheet at fair value, except
for nonparticipating certificates of deposit and investment contracts that are
reported at cost because they are not transferable and they have terms that are not
affected by changes in market interest rates.
Interest income reports interest earnings. Net increase (decrease) in investment
fair value reports changes in fair value, and any gains or losses realized upon the
liquidation, maturity or sale of investments.
The City pools cash and investments of all funds, except for assets held by fiscal
agents. Each fund's share in this pool is displayed in the accompanying financial
statements as cash and investments. Interest income eamed by the pooled
investments is allocated to the various funds based on each fund's average cash
and investment balance.
Capital assets (including infrastructure) are recorded at cost where historical
records are available and at an estimated original cost where no historical records
exist. Contributed capital assets are valued at their estimated fair market value at
the date of the contribution. Generally, capital asset purchases in excess of $500
are capitalized if they have an expected useful life of three years or more. The
exception to this policy is the purchase of computers and related equipment.
These acquisitions are expensed and booked as physical inventory
Capital assets include public domain (infrastructure) general capital assets
consisting of certain improvements including roads, streets, sidewalks, medians,
and storm drains. The City chose to record and value infrastructure assets in their
entirety (e.g., prior to 1980).
38
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
(g)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Capital Assets. (Continued)
Capital assets used in operations are depreciated over their estimated useful lives
using the straight -line method in the government wide financial statements.
Depreciation is charged as an expense against operations and accumulated
depreciation is reported on the respective balance sheet. The range of lives used
for depreciation purposes for each capital asset class are as follows:
Building and improvements 30 -50 years
Furniture and fixtures 3 -15 years
Equipment 3 -15 years
Infrastructure:
Pavement 25 years
Curbs and gutters 50 years
Sidewalks 50 years
Bridges 50 years
Medians 50 years
Traffic signals 15 years
Storm drain system 75 years
(h) Property Taxes
Property taxes are assessed and collected each fiscal year according to the
following property tax calendar:
Lien Date
Levy Date
Due Date
Delinquent Date
Under California law, property taxes are assessed and collected by the counties up
to 1 percent of assessed value, plus other increases approved by the voters. The
property taxes go into a pool, and are then allocated to the cities based on complex
formulas prescribed by the state statutes. A delinquency penalty of 10 percent is
assessed by the County of Riverside. If taxes become delinquent, subject
properties may be deeded to the State and may be sold by the County for taxes
plus a 1.5 percent per month redemption fee.
The City accrues as a receivable all property taxes normally received from the
County within sixty days of the end of the fiscal year.
39
March 1
July 1
November 1 (first installment)
March 1 (second installment)
December 10 (first installment)
April 10 (second installment)
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(i) Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other
commitments for the expenditure of monies are recorded in order to reserve that
portion of the applicable appropriation, is employed as an extension of formal
budgetary integration in governmental funds. Encumbrances outstanding at year-
end are reported as reservations of fund balances since they do not constitute
expenditures or liabilities.
0)
(m)
Self- Insurance
The City is self insured for the first $250,000 of each workers' compensation
claim. Losses in excess of these amounts up to $150 million are covered by
outside insurance. The City is completely self- insured for unemployment claims.
(k) Accounting for Self- Insurance Activities
The City records a liability for litigation, judgments, and claims (including claims
incurred, but not reported) when it is probable that an asset has been impaired or a
liability has been incurred prior to year end and the probable amount of loss (net
of any insurance recovery) can be reasonably estimated. Liabilities resulting from
self- insurance activities are recorded as claims payable in the government -wide
financial statements since these liabilities are funded on a pay -as- you -go basis and
are not payable from currently available financial resources.
(1) Advances to Other Funds
Long -term interfund advances are recorded as a receivable and as reserved fund
balance by the advancing governmental fund in the fund financial statements.
Property Held for Resale
Property held for resale represents land, structures and their related improvements
that were acquired for resale in accordance with the objectives of the Whitewater
Project Area and Northside Project Area Redevelopment Plans. Property held for
resale is valued at historical cost.
(n) Transient Occupancy Tax
Approximately 19% of General Fund revenue is derived from transient occupancy
tax collected within the City
40
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
(o) Compensated Absences
(p)
(q)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STA I'EMENTS
(Continued)
In accordance with GASB Statement No. 16, a liability is recorded for unused
vacation and similar compensatory leave balances since the employees'
entitlement to these balances are attributable to services already rendered and it is
probably that virtually all of these balances will be liquidated by either paid time
off or payments upon termination or retirement.
Under GASB Statement No. 16, a liability is recorded for unused sick leave
balances only to the extent that it is probable that the unused balances will result
in termination payments. Other amounts of unused sick leave are excluded from
the liability since their payment is contingent solely upon the occurrence of a
future event (illness) which is outside the control of the City and the employee.
In governmental funds, compensated absences (unpaid vacation and sick leave)
are recorded as expenditures in the year they are paid. The balance of unpaid
vacation and vested sick leave at year end is recorded in the government -wide
financial statements as these amounts will be liquidated from future resources.
Depending upon the length of employment, full -time City employees earn 12 to
18 vacation days per year. Employees' vacation may not exceed 30 working days
during any calendar year without the approval of the City Manager.
Full -time City employees are provided with 12 sick days a year. A maximum of
120 days of sick leave may be accumulated.
Upon termination or retirement, full -time employees are entitled to receive
compensation at their current base salary for all unused vacation leave and
floating holidays. Upon termination, full -time permanent employees receive 50%
of their accrued sick leave at their current pay rate.
Interfund Transfers
Transfers are reported as other financing sources and uses in the statement of
revenues, expenditures and changes in fund balances in the fund financial
statements.
Prepaid Items
Prepaid items are reported using the consumption method.
41
(1) Reporting Entity and Summary of Significant Accounting Policies. (Continued)
(r) Use of Estimates
The preparation of basic financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenditures during the reporting period. Actual results could differ from those
estimates.
(2) Cash and Investments
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Cash and investments as of June 30, 2009 are classified in the accompanying financial
statements as follows:
Statement of net assets:
Cash and investments $135,611,634
Cash and investments held by fiscal agent 82,670,114
Fiduciary funds:
Cash and investments 3,640,828
Cash and investments held by fiscal agent 1.319 784
Total cash and investments $223242360
Cash and investments as of June 30, 2009 consist of the following:
Cash on hand 2,750
Deposits with financial institutions 1,024,978
Investments 222.214.632
Total cash and investments 8223 242160
42
(2) Cash and Investments (Continued)
Local Agency Bonds
U.S. Treasury Obligations
U.S. Agency Securities
Bankers Acceptances
Commercial Paper
Negotiable Certificates of Deposit
Repurchase Agreements
Reverse Repurchase Agreements
Medium -Term Notes
Mutual Funds
Money Market Mutual Funds
Mortgage Pass Through Securities
County Pooled Investment Funds
Local Agency Investment Fund (LAIF)
JPA Pools (other investment pools)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Investments Authorized by the California Government Code and the City's Investment
Policy
The table below identifies the investment types that are authorized for the City by the
California Government Code and the City's investment policy The table also identifies
certain provisions of the California Government Code (or the City's investment policy, if
more restrictive) that address interest rate risk and concentration of credit risk. This table
does not address investments of debt proceeds held by fiscal agent that are governed by
the provisions of debt agreements of the City, rather than the general provisions of the
California Government Code or the City's investment policy
Investment Types
Authorized by State Law
Authorized
By Investment *Maximum
Policy Maturity
No 5 years
Yes 5 years
Yes 5 years
No 180 days
No 270 days
Yes 5 years
Yes 1 year
No 92 days
No 5 years
No N/A
No N/A
No 5 years
No N/A
Yes N/A
No N/A
*Maximum
Percentage
Of Portfolio
None
None
None
40%
25%
30%
None
20% of base value
30%
20%
20%
20%
None
None
None
*Maximum
Investment
In One Issuer
None
None
None
30%
10%
$1,000,000
None
None
None
10%
10%
None
None
None
None
Based on state law requirements or investment policy requirements, whichever is more restrictive.
43
(21 Cash and Investments. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Investments Authorized by Debt Agreements
Investment of debt proceeds held by fiscal agent are governed by provisions of the debt
agreements, rather than the general provisions of the California Government Code or the
City's investment policy The table below identifies the investment types that are
authorized for investments held by fiscal agent. The table also identifies certain
provisions of these debt agreements that address interest rate risk and concentration of
credit risk.
Authorized
investment Tyne
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances 180 days None None
Commercial Paper 270 days None None
Money Market Mutual Funds N/A None None
Investment Contracts 30 years None None
Repurchase Agreements 30 Days None None
State or Municipal Obligations None None None
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the
greater the sensitivity of its fair value to changes in market interest rates. One of the ways
that the City manages its exposure to interest rate risk is by purchasing a combination of
shorter term and longer term investments and by timing cash flows from maturities so
that a portion of the portfolio is maturing or coming close to maturity evenly over time as
necessary to provide the cash flow and liquidity needed for operations.
44
Maximum Maximum
Maximum Percentage Investment
Maturity Allowed in One Issuer
(2) Cash and Investments. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Disclosures Relating to Interest Rate Risk. (Continued)
Information about the sensitivity of the fair values of the City's investments (including
investments held by fiscal agent) to market interest rate fluctuations is provided by the
following table that shows the distribution of the City's investments by maturity
Investment Tyne
Remaining Maturity (in Months)
12 Months 13 to 24 25 to 36 37 to 48 49 to 60 More than
Total Or Less Months Months Months Months 60 Months
Investments held by City:
U.S. Treasury Notes 1,538,843 879,324 659,519
U.S. Treasury Strips 10,574,765 1,169,719 1,254,674 1,741,023 1,286,477 5,122,872
Federal Agency Securities 92,335,897 1,052,471 8,537,585 17,099,000 22,996,885 19,093,492 23,556,464
State Investment Pool
(LATE) 33,025,654 33,025,654
Investments held by fiscal
Agent:
U.S. Treasury Notes 35,683,318 24,178,113 11,505,205
Federal Agency Securities 47,462,914 21,396,836 19,292,942 2,305,641 4,467,495
Money Market Funds 1593.241 1 593.241
Total
$222.214.632 R3. 795 755 39 905 251 18 357 K74 24.737.208 72 FRS 61D 33 14K R31
The City's investments (including investments held by fiscal agents) include the
following investments whose fair values are highly sensitive to interest rate fluctuations
(to a greater degree than already indicated in the information provided above):
Fair Value at
Year End
Callable Federal agency securities with interest rates that range
from 5.0 percent to 7.0 percent. $18,978,168
45
(21 Cash and Investments. (Continued)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its
obligation to the holder of the investment. This is measured by the assignment of a rating
by a nationally recognized statistical rating organization. Presented below is the minimum
rating required by (where applicable) the California Government Code, the City's
investment policy, or debt agreements, and the actual rating as of year end for each
investment type.
Investment Tyne
U.S. Treasury notes
U.S. Treasury strips
Federal agency securities
State investment pool
Held by bond trustee:
U.S. Treasury notes
Federal agency
securities
Money market funds
Total
Concentration of Credit Risk
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Minimum Exempt
Legal From
Total Rating Disclosure
1,538,843 N/A 1,538,843
10,574,765 N/A 10,574,765
92,335,897 N/A
33,025,654 N/A
35,683,318 N/A 35,683,318
47,462,914 N/A
1.593.241 A
5222.214.632
Aaa
92,335,897
47,462,914
1.593.241
Not
Rated
33,025,654
47 796 926 141 399 059 33025.654
The investment policy of the City contains no limitations on the amount that can be
invested in any one issuer beyond that stipulated by the California Government Code.
Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and
external investment pools) that represented 5% or more of total City investments are as
follows:
FNMA
FHLB
FFCB
FHLMC
Issuer
Investment
Type
Federal agency securities
Federal agency securities
Federal agency securities
Federal agency securities
46
Reported
Amount
$20,020,031
55,022,229
32,127,190
32,629,361
(2) Cash and Investments. (Continued)
Concentration of Credit Risk. (Continued)
Investments in any one issuer that represent 5% or more of total investments by reporting
unit (primary government, discretely presented component unit, governmental activities,
major fund, nonmajor funds in the aggregate, etc.) are as follows. Generally this is
applicable for investments held by fiscal agent. $11,960,326 and $25,493,407 of the cash
and investments held by fiscal agent reported in the Redevelopment Agency (a
component unit of the City) are held in the forms of FNMA and FHLB.
Custodial Credit Risk
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository
financial institution, a government will not be able to recover its deposits or will not be
able to recover collateral securities that are in the possession of an outside party The
custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty (e.g., broker dealer) to a transaction, a government will not be able to
recover the value of its investment or collateral securities that are in the possession of
another party The California Government Code and the City's investment policy do not
contain legal or policy requirements that would limit the exposure to custodial credit risk
for deposits or investments, other than the following provision for deposits: The
California Government Code requires that a financial institution secure deposits made by
state or local governmental units by pledging securities in an undivided collateral pool
held by a depository regulated under state law (unless so waived by the governmental
unit). The market value of the pledged securities in the collateral pool must equal at least
110% of the total amount deposited by the public agencies. California law also allows
financial institutions to secure City deposits by pledging first trust deed mortgage notes
having a value of 150% of the secured public deposits.
For investments identified herein as held by fiscal agent, the fiscal agent selects the
investment under the terms of the applicable trust agreement, acquires the investment,
and holds the investment on behalf of the reporting government.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is
regulated by the California Government Code under the oversight of the Treasurer of the
State of California. The fair value of the City's investment in this pool is reported in the
accompanying financial statements at amounts based upon the City's pro -rata share of the
fair value provided by LAW for the entire LAW portfolio (in relation to the amortized
cost of that portfolio). The balance available for withdrawal is based on the accounting
records maintained by LAW, which are recorded on an amortized cost basis. LAW is not
rated.
47
(3) Due From and Due to Other Funds
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Current interfund receivables and payables balances at June 30, 2009 are as follows:
Due to
General fund
Library Fund
Fire Tax Fund
Low Cost Housing Fund
Northside Debt Service
Northside Capital Projects
Total
Fire
Tax
Fund
$1,800
Whitewater
Debt
Service
83,406
48
Northside Nonmajor
Capital Governmental
Projects Funds
851,496
67,254
66,646
217,455
8
Total
69,054
79,757
217,455
83,406
851,496
8
1800 96,5ll $51.496 346. 53R 1 301 176
The General Fund receivable of $69,054, is accrued revenue from the Community
Facilities District Fund and the Fire Tax Fund. The Library Fund receivable of $79,756 is
accrued revenue from the Community Services District Fund, the Community Facilities
District Fund, and the Whitewater Debt Service Funds. The Fire Tax Fund receivable,
$217,455, is accrued revenue from the Community Services District Fund and
Community Facilities District Fund. The Low Cost Housing Fund receivable of $83,406
is accrued 20% pass -thru from the Whitewater Debt Service Fund The Northside Debt
Service Fund receivable of $851,496, is accrued reimbursement of costs from the
Northside Capital Projects Fund. The Northside Capital Projects Fund receivable of $8, is
accrued reimbursement of costs from the Development Fee Fund.
(41 Interfund Transfers
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Interfund transfers during the year ended June 30, 2009 consisted of the following:
Transfer in:
Transfer From:
Low Northside Whitewater Northside
Cost Housing Capital Debt Debt Nonmajor
General Housing Authority Projects Service Service Governmental
Fund Fund Fund Fund Fund Fund and Total
General Fund 2,132,855 2,132,855
Library Fund 21,055 2,722,380 2,743,435
Fire Tax Fund 217,539 8,400 4,112,275 4,338,214
Housing Authority 8,544,247 8,544,247
Low Cost Housing
Fund 4,014,365 3,100,000 7,114,365
Northside Debt
Service 6,348,357 6,348,357
Whitewater Capital
Project 1,215,328 1,215,328
Nonmajor
Governmental 164.588 5,133 17.011 16.004 402.736
Total $522,127 2,544.247 34,588 6.165 16R 5.779.691 3 100 000 R 981 514 1" 819 537
Transfers were used to:
1 Transfer from the Community Facilities District to the General Fund to reimburse
the General Fund for expenditures incurred on behalf of the Community Facilities
District.
2. Transfer in -lieu taxes from the Housing Authority Fund to the Library Fund.
3 Transfer to the Library Fund from the Community Services District Fund (conduit
fund) for property taxes and the Redevelopment Agency's contribution.
4. Transfer from the Community Facilities District to the Library Fund to reimburse
the Library Fund for expenditures incurred on behalf of the Community Facilities
District.
5 Transfer from the General Fund to the Fire Tax Fund for reimbursement to public
safety
6. Transfer in -lieu taxes from the Housing Authority Fund to the Fire Tax Fund.
49
(41 Interfund Transfers. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
7 Transfer to the Fire Tax Fund from the Community Services District Fund
(conduit fund) for property taxes and the Redevelopment Agency's contribution.
8. Transfer from the Community Facilities District to the Fire Tax Fund to reimburse
the Fire Tax Fund for expenditures incurred on behalf of the Community Facilities
District.
9 Transfer 20% tax increment from the Low Cost Housing Fund (conduit fund) to
the Housing Authority Fund.
10. Transfer 20% tax increment from the Whitewater Debt Service Fund to the Low
Cost Housing Fund.
11 Transfer 20% tax increment from the Northside Debt Service Fund to the Low
Cost Housing Fund.
12. Transfer from the Northside Capital Projects Fund to the Northside Debt Service
Fund for funding of debt service.
13. Transfer from the Whitewater Debt Service Fund to the Whitewater Capital
Projects Fund for funding of capital projects.
14 Provide operating subsidy from General Fund to Landscape and Lighting, Zone A,
Fund.
15 Transfer from the General Fund to the Joint Power Financing Authority Fund to
pay expenditures incurred by the Joint Power Financing Authority Fund.
16. Transfer in -lieu taxes from the Housing Authority Fund to the Landscape and
Lighting Districts Fund
17 Transfer in -lieu taxes from the Housing Authority Fund to the Parkland Fund.
18. Transfer in -lieu taxes from the Housing Authority Fund to the Storm Water
Quality Fund.
19 Transfer from the Northside Capital Projects Fund to fund the Library Capital
Project Fund.
20. Transfer from the Development Fee Fund to the Joint Power Financing Authority
Fund to reimburse the Joint Power Financing Authority Fund for expenditures
incurred on behalf of the Development Fee Fund.
50
(5) Capital Assets
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Capital asset activity for the year ended June 30, 2009 was as follows:
Government activities:
Buildings
Improvements
Furniture and fixtures
Equipment
Infrastructure improved bike
Infrastructure road system
Infrastructure storm drain
System
Total cost of
depreciable assets
Less accumulated depreciation:
Buildings
Improvements
Furniture and fixtures
Equipment
Infrastructure improved bike
Infrastructure road system
Infrastructure storm drain
system
Total accumulated
depreciation
Net depreciable assets
Capital assets not depreciated:
Land
Rights of way road system
Rights of way off -road
trail system
Work In Progress
Total capital assets
not depreciated
Total capital assets, net
Balance at
July 1. 2008
44,323,444
1,906,521
3,773,360
2,289,148
trails 54,068
105,495,407
16.986.570
174.828.518
(7,463,807)
(483,481)
(2,501,168)
(1,334,850)
trails (3,526)
(32,446,881)
(4.769.5651
(49.003.2781
125.825.240
19,808,805
11,188,410
1,077,859
1.334.294
33.409 368
S1 59 214 608
51
Additions
4,923
845,721
295,934
345,734
7,740
1,482,091
149.835
3.131.978
(1,050,133)
(47,694)
(194,076)
(245,251)
(1,085)
(2,766,665)
(226.4681
(4.531.3721
(1.399.3941
5,660,593
1.207.547 (782.4151
6.868.40 (782.4151
5 46R 746 74.696)
Balance at
Deletions June 30. 2009
44,328,367
2,752,242
(11,281) 4,058,013
2,634,882
61,808
(147,102) 106,830,396
17.136.405
(1583831 177.802.113
(8,513,940)
(531,175)
(2,695,244)
5,390 (1,574,711)
(4,611)
60,711 (35,152,835)
(4.996.0331
66.101 (53.468.5491
(92.282) 124.333.564
25,469,398
11,188,410
1,077,859
1 759 426
39.495.093
163.R78 657
(5) Capital Assets. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Depreciation expensed was charged in the following functions in the Statement of
Activities:
General government 770,333
Public safety 135,941
Public works 3,171,960
Cultural and recreation 453.132
Total $4 531 372
52
(61 Long -term Liabilities
CITY OF RANCHO MIRAGE
NO 1'bS TO BASIC FINANCIAL STATEMENTS
(Continued)
Long-term liability activity for the year ended June 30, 2009 was as follows:
Beginning Ending Due within
Balance Additions tlerretinn p en rem entc Balance fine year
Revenue bonds payable:
2005A lease refunding
revenue bonds 5,470,000 160,000 5,310,000 165,000
Tax allocation bonds payable:
2001A -1 subordinate lien tax
allocation bonds 1,795,000 90,000 1,705,000 90,000
2001A -E subordinate lien tax
allocation bonds 3,985,000 190,000 3,795,000 200,000
2001A -1 tax allocation bonds 13,680,000 470,000 13,210,000 495,000
2001A -E tax allocation bonds 13,380,000 285,000 13,095,000 300,000
2001B -I tax allocation bonds 3,030,000 60,000 2,970,000 65,000
2001B -E tax allocation bonds 1,115,000 20,000 1,095,000 25,000
2002A subordinate lien tax
allocation bonds 5,560,000 415,000 5,145,000 435,000
2003 A -1 Subordinate lien tax
allocation bonds 1,352,266 73,881 1,426,147
2003 A -E Subordinate lien tax
allocation bonds 4,705,000 225,000 4,480,000 225,000
2003 A -T Subordinate lien tax
allocation bonds 1,120,000 10,000 1,110,000 15,000
2003 A Housing TABs 31,420,000 1,105,000 30,315,000 1,135,000
2003 A -1 Tax allocation bonds 1,845,377 103,938 1,949,315
2003 A -E Tax allocation bonds 17,105,000 385,000 16,720,000 395,000
2003 A -T Tax allocation bonds 4,235,000 85,000 4,150,000 85,000
2003 B Subordinate lien tax
allocation bonds 1,890,000 35,000 1,855,000 30,000
2006 A- Whitewater TA Ref
bonds 23,195,000 855,000 22,340,000 885,000
2006 A- North side TA Ref
bonds 23,430,000 365,000 23,065,000 365,000
2008 A Subordinate lien tax
allocation bonds 22,040,000 775,000 21,265,000 460,000
Other long -term liabilities:
ACBCI'Pay Back Deficit" 92,287 92,287
Compensated absences 1,365,129 786,199 613,250 1,538,078 643,912
OPEB liability 241,801 241,801 Claims payable 297. 711_628 60.155 444.587 60000
Total $159 970 ARK 71187 915 177 819 d.445 205 n7 ms 41 6.073.912
53
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Compensated absences, capital leases and claim liabilities have been typically liquidated
from the General Fund.
2005A Lease Refunding Revenue Bonds
On May 1, 2005, the Rancho Mirage Joint Powers Financing Authority, a component unit
of the City of Rancho Mirage issued $5,925,000 in Refunding Revenue Bonds. The
Bonds were issued to provide a portion of the funds to refund the issuer's Library Lease
Revenue Bonds, Series 1995, originally issued in the principal amount of $3,375,000.
The 1995 Bonds were issued to refund the issuer's Library Lease Revenue Bonds, Series
1991B, that were used to finance the acquisition, construction and equipping of a library
facility for the City The City had previously withdrawn from the Riverside City and
County Public Library System, and receives the portion of property tax allocated to
library services collected within the City limits.
A portion of the proceeds of the 2005A Bonds, along with certain remaining funds from
the 1995 Bonds were used to establish an escrow fund for the 1995 Bonds to be held in
trust by an escrow agent until the first redemption date. The series 1995 Bonds were
redeemed in full on August 1, 2005.
The Authority has leased approximately 10.5 acres of land and the improvements thereon
to the City pursuant to a Lease, dated as of July 1, 1995 Pursuant to a Site Lease, dated
as of July 1, 1995 between the City and the issuer, the City has leased the Leased Property
to the issuer in consideration for entering into the Lease. The City is obligated to pay
rental payments under the Lease from any legally available monies, including amounts in
its General Fund. The City has covenanted in the Lease that, so long as the City has the
use and occupancy of the Leased Property, it will make rental payments "Base Rental
to the issuer. The Base Rental is calculated to be an amount sufficient to permit the issuer
to pay all scheduled debt service on the Bonds when due. The amount required for the
bond reserve of the 2005A bonds was $392,914 The reserve account balance was
$391,956 as of June 30, 2009
Beginning April 1, 2006, the 2005A Bonds was due in annual installments of $150,000 to
$375,000 through April 1, 2030. Interest ranging from 3% to 4.5% is due in annual
installment on April 1 of each year. The annual debt service requirements for the lease
revenue bonds as of June 30, 2009 are as follows:
54
(6) Long-term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2005A Lease Refunding Revenue Bonds. (Continued)
The annual payment amounts required to retire the 2005A bonds outstanding as of June
30, 2009 are as follows:
Interest Interest Principal
Fiscal Due Due Total Due Total Annual
Year April 1 October 1 Interest April 1 Debt Service
2010 111,741 111,741 223,482 165,000 388,482
2011 108,957 108,957 217,914 175,000 392,914
2012 106,004 106,004 212,008 180,000 392,008
2013 102,741 102,741 205,482 185,000 390,482
2014 99,388 99,388 198,776 190,000 388,776
2015 95,955 95,954 191,889 200,000 391,889
2016 91,944 91,945 183,889 205,000 388,889
2017 87,716 87,716 175,432 215,000 390,432
2018 83,282 83,282 166,564 225,000 391,564
2019 78,641 78,642 157,283 235,000 392,283
2020 73,648 73,647 147,295 245,000 392,295
2021 68,441 68,441 136,882 255,000 391,882
2022 63,023 63,022 126,045 265,000 391,045
2023 57,325 57,325 114,650 275,000 389,650
2024 51,309 51,310 102,619 285,000 387,619
2025 45,075 45,075 90,150 300,000 390,150
2026 38,475 38,475 76,950 315,000 391,950
2027 31,388 31,387 62,775 325,000 387,775
2028 24,075 24,075 48,150 340,000 388,150
2029 16,425 16,425 32,850 355,000 387,850
2030 8.437 5.438 16.875 375.000 391.875
TOTALS S1 443 990 1 444.990 2. 557 960 5.310.000 8.197.960
55
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2001A -1 Subordinate Lien Tax Allocation Parity Bonds and 2001A -E Subordinate Lien
Tax Allocation Bonds
On July 1, 2001, the Redevelopment Agency of the City of Rancho Mirage issued
$2,340,000 of Subordinate Lien Tax Allocation Bonds, Series 2001A -1 and $4,680,000
of Subordinate Lien Tax Allocation Bonds, Series 2001A -E. The 2001A bonds were
issued for the purpose of financing certain improvements in the Whitewater
Redevelopment Project Area of the Agency, to fund an escrow for future improvements
in the project area, to purchase a debt service reserve fund surety bond for the bonds, and
to pay the costs of issuing the bonds. Payment of principal, premium, if any and interest
on the 2001A -1 bonds and the 2001A -E bonds are subordinate to payment of principal,
premium, if any and interest on the Whitewater Project Area 1994A bonds and the
Whitewater Project Area 1997A bonds and certain other outstanding obligations of the
Agency The 1994A and the 1997A bonds are referred to herein as the Senior Lien
Bonds.
The 2001A -1 bonds have annual interest ranging from 3 75% to 4.625% and annual
principal installments ranging from $70,000 to $110,000 through April 1, 2015 and are
subject to mandatory redemption from a sinking fund account in amounts ranging from
$115,000 to $160,000 on April 1 beginning 2016 through 2023. The 2001A -E bonds
have annual interest ranging from 3.75% to 4.8% and annual principal installments
ranging from $165,000 to $245,000 through April 1, 2015 and are subject to mandatory
redemption from a sinking fund account in amounts ranging from $260,000 to $365,000
on April 1 beginning 2016 through 2023. The 2001A -1 and the 2001A -E bonds are
secured by the surplus tax revenues of the Agency
The 2001A -1 and 2001A -E bond resolution and indentures require that bond reserve be
equal to the full amount of maximum annual debt service on all outstanding Senior Lien
Bonds. As of June 30, 2009, the reserve for the 2001A -1 and 2001A -E bonds was held
by the fiscal agent in the form of a surety bond.
56
(6) Lon e -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2001A -1 Subordinate Lien Tax Allocation Parity Bonds and 2001A -E Subordinate Lien
Tax Allocation Bonds. (Continued)
The annual payment amounts required to retire the (Whitewater Project) 2001A -1 bonds
outstanding as of June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year Anril 1 October 1 Interest April 1 Debt Service
2010 40,656 40,655 81,311 90,000 171,311
2011 38,856 38,855 77,711 95,000 172,711
2012 36,896 36,897 73,793 100,000 173,793
2013 34,771 34,772 69,543 100,000 169,543
2014 32,584 32,584 65,168 105,000 170,168
2015 30,169 30,169 60,338 110,000 170,338
2016 27,625 27,625 55,250 115,000 170,250
2017 24,750 24,750 49,500 125,000 174,500
2018 21,625 21,625 43,250 130,000 173,250
2019 18,375 18,375 36,750 135,000 171,750
2020 15,000 15,000 30,000 140,000 170,000
2021 11,500 11,500 23,000 145,000 168,000
2022 7,875 7,875 15,750 155,000 170,750
2023 4,000 4,000 8,000 160,000 168,000
TOTALS 344,682 344,682 689,364 1,705,000 2,394,364
57
(61 Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2001A -1 Subordinate Lien Tax Allocation Parity Bonds and 2001A -E Subordinate Lien
Tax Allocation Bonds. (Continued)
The annual payment amounts required to retire the (Whitewater Project) 2001A -E bonds
outstanding as of June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year Anril 1 October 1 Interest April 1 Debt Service
2010 92,877 92,877 185,754 200,000 385,754
2011 88,877 88,877 177,754 205,000 382,754
2012 84,521 84,520 169,041 215,000 384,041
2013 79,818 79,817 159,635 225,000 384,635
2014 74,755 74,755 149,510 235,000 384,510
2015 69,174 69,174 138,348 245,000 383,348
2016 63,294 63,294 126,588 260,000 386,588
2017 56,631 56,632 113,263 270,000 383,263
2018 49,713 49,712 99,425 285,000 384,425
2019 42,409 42,410 84,819 300,000 384,819
2020 34,722 34,722 69,444 315,000 384,444
2021 26,650 26,650 53,300 330,000 383,300
2022 18,194 18,194 36,388 345,000 381,388
2023 9,353 9,353 18,706 365,000 383,706
TOTALS 790,988 790,987 1,581,975 3,795,000 5,376,975
58
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2001A -1 Tax Allocation Bonds. 2001A -E Tax Allocation Bonds. 2001B -1 Subordinate
Lien Tax Allocation Bonds and 2001B -E Subordinate Lien Tax Allocation Bonds
On July 1, 2001, the Redevelopment Agency of the City of Rancho Mirage issued
$16,860,000 of Tax Allocation Bonds, Series 2001A -1, $14,425,000 of Tax Allocation
Bonds, Series 2001A -E, $3,440,000 of Subordinate Lien Tax Allocation Bonds, Series
2001B -1 and $1,195,000 Subordinate Lien Tax Allocation Bonds, Series 2001B -E. The
2001A bonds were issued for the purpose of financing certain improvements in the
Redevelopment Plan 1984 Project Area of the Agency, to fund an escrow for future
improvements in the project area, and to pay the costs of issuing the bonds. The 2001B
bonds were issued to advance refund $3,010,000 of the outstanding 1991A Civic Center
Revenue Bonds, finance certain improvements within the 1984 Project Area, to fund an
escrow for future improvements within the project area, fund a reserve account for the
2001B Bonds, and to pay the cost of issuing the bonds. The proceeds used to advance
refund the 1991A series were used to purchase U.S government securities. Those
securities were placed in an irrevocable trust with an escrow agent to provide for all
future debt service payments on the 199IA series. Payment of principal, premium, if any,
and interest on the series 2001B bonds is subordinate to payment of principal, premium,
if any and interest on the 2001A bonds and certain other outstanding obligations of the
Agency
The 2001A -1 bonds have annual interest ranging from 3.75% to 4.625% and annual
principal installments ranging from $405,000 to $605,000 through April 1, 2015 and are
subject to mandatory redemption from a sinking fund account in amounts ranging from
$365,000 to $750,000 on April 1 beginning 2016 through 2033. The 2001A -E bonds
have annual interest ranging from 3 75% to 4 75% and annual principal installments
ranging from $250,000 to $370,000 through April 1, 2015 and are subject to mandatory
redemption from a sinking fund account in amounts ranging from $390,000 to $920,000
on April 1 beginning 2016 through 2033 The 2001A -1 and 2001A -E bonds are secured
by the surplus tax revenues of the Agency
The 2001B -1 bonds have annual interest ranging from 3 75% to 4.80% and annual
principal installments ranging from $50,000 to $90,000 through April 1, 2012 and are
subject to mandatory redemption from a sinking fund account in amounts ranging from
$75,000 to $215,000 on April 1 beginning 2013 through 2033. The 2001B -E bonds have
annual interest ranging from 4.0% to 5.0% and annual principal installments ranging from
$20,000 to $25,000 through April 1, 2012 and are subject to mandatory redemption from
a sinking fund account in amounts ranging from $25,000 to $50,000 on April 1 beginning
2013 through 2024 The 2001B -1 and 2001B -E bonds are secured by the surplus tax
revenues of the Agency
59
(6) Long -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STA1
(Continued)
2001A -1 Tax Allocation Bonds. 2001A -E Tax Allocation Bonds. 2001B -1 Subordinate
Lien Tax Allocation Bonds and 2001B -E Subordinate Lien Tax Allocation Bonds.
(Continued)
The 2001A bond resolution and indentures require that the bond reserve policy, when
added to the to amounts on deposit in the Senior Reserve Account established under the
Senior indenture, be equal to the full amount of maximum annual debt service on all
outstanding Senior Lien Bonds and the Series 2001A bonds. As of June 30, 2009, the
2001A reserve policy was held in the form of a surety bond by the fiscal agent. The
2001B bond resolution and indentures require that the subordinate bond reserve be equal
to the full amount of maximum annual debt service on all outstanding Series 2001B
bonds. The amount required for the bond reserve of the 2001B bonds is $316,815 As of
June 30, 2009, the 2001B reserve that was held by the fiscal agent was $498,980.
60
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2001A -1 Tax Allocation Bonds. 2001A -E Tax Allocation Bonds. 2001B -1 Subordinate
Lien Tax Allocation Bonds and 2001B -E Subordinate Lien Tax Allocation Bonds.
(Continued)
The annual payment amounts required to retire the (1984 Project) 2001A -1 bonds
outstanding at June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year Anril 1 October 1 Interest Anril 1 Debt Service
2010 319,519 319,519 639,038 495,000 1,134,038
2011 309,619 309,619 619,238 510,000 1,129,238
2012 299,100 299,100 598,200 535,000 1,133,200
2013 287,732 287,731 575,463 555,000 1,130,463
2014 275,590 275,591 551,181 575,000 1,126,181
2015 262,366 262,365 524,731 605,000 1,129,731
2016 248,375 248,375 496,750 635,000 1,131,750
2017 232,500 232,500 465,000 665,000 1,130,000
2018 215,875 215,875 431,750 365,000 796,750
2019 206,750 206,750 413,500 385,000 798,500
2020 197,125 197,125 394,250 400,000 794,250
2021 187,125 187,125 374,250 425,000 799,250
2022 176,500 176,500 353,000 445,000 798,000
2023 165,375 165,375 330,750 465,000 795,750
2024 153,750 153,750 307,500 495,000 802,500
2025 141,375 141,375 282,750 520,000 802,750
2026 128,375 128,375 256,750 545,000 801,750
2027 114,750 114,750 229,500 570,000 799,500
2028 100,500 100,500 201,000 600,000 801,000
2029 85,500 85,500 171,000 630,000 801,000
2030 69,750 69,750 139,500 645,000 784,500
2031 53,625 53,625 107,250 680,000 787,250
2032 36,625 36,625 73,250 715,000 788 250
2033 18,750 18,750 37,500 750,000 787,500
TOTALS 4,286,551 4,286,550 8,573,101 13,210,000 21,783,101
61
(61 Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2001A -1 Tax Allocation Bonds. 2001A -E Tax Allocation Bonds. 2001B -1 Subordinate
Lien Tax Allocation Bonds and 2001B -E Subordinate Lien Tax Allocation Bonds.
(Continued)
The annual payment amounts required to retire the (1984 Project) 2001A -E bonds
outstanding at June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year April 1 October 1 Interest April 1 Debt Service
2010 333,959 333,960 667,919 300,000 967,919
2011 327,959 327,960 655,919 310,000 965,919
2012 321,566 321,565 643,131 325,000 968,131
2013 314,456 314,457 628,913 340,000 968,913
2014 306,806 306,807 613,613 355,000 968,613
2015 298,375 298,375 596,750 370,000 966,750
2016 289,588 289,587 579,175 390,000 969,175
2017 279,594 279,594 559,188 405,000 964,188
2018 269,216 269,215 538,431 430,000 968,431
2019 258,197 258,197 516,394 450,000 966,394
2020 246,666 246,665 493,331 475,000 968,331
2021 234,494 234,494 468,988 500,000 968,988
2022 221,681 221,682 443,363 525,000 968,363
2023 207,900 207,900 415,800 550,000 965,800
2024 193,463 193,462 386,925 580,000 966,925
2025 178,238 178,237 356,475 610,000 966,475
2026 162,225 162,225 324,450 640,000 964,450
2027 145,425 145,425 290,850 675,000 965,850
2028 127,706 127,707 255,413 710,000 965,413
2029 109,069 109,069 218,138 750,000 968,138
2030 89,382 89,381 178,763 785,000 963,763
2031 68,775 68,775 137,550 830,000 967,550
2032 46,988 46,987 93,975 870,000 963,975
2033 24,150 24,150 48,300 920,000 968,300
TOTALS 5,055,878 5,055,876 10,111,754 13,095,000 23,206,754
62
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2001A -1 Tax Allocation Bonds. 2001A -E Tax Allocation Bonds.. 2001B -1 Subordinate
Lien Tax Allocation Bonds and 2001B -E Subordinate Lien Tax Allocation Bonds.
(Continued)
The annual payment amounts required to retire the (1984 Project) 2001B -1 bonds
outstanding at June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year April 1 October 1 Interest April 1 Debt Service
2010 81,865 81,865 163,730 65,000 228,730
2011 80,370 80,370 160,740 65,000 225,740
2012 78,843 78,842 157,685 70,000 227,685
2013 77,163 77,162 154,325 75,000 229,325
2014 75,100 75,100 150,200 75,000 225,200
2015 73,038 73,037 146,075 80,000 226,075
2016 70,838 70,837 141,675 85,000 226,675
2017 68,500 68,500 137,000 90,000 227,000
2018 66,025 66,025 132,050 95,000 227,050
2019 63,413 63,412 126,825 100,000 226,825
2020 60,662 60,663 121,325 105,000 226,325
2021 57,775 57,775 115,550 110,000 225,550
2022 54,750 54,750 109,500 120,000 229,500
2023 51,450 51,450 102,900 125,000 227,900
2024 48,012 48,013 96,025 130,000 226,025
2025 44,437 44,438 88,875 140,000 228,875
2026 40,500 40,500 81,000 145,000 226,000
2027 36,422 36,422 72,844 155,000 227,844
2028 32,062 32,063 64,125 165,000 229,125
2029 27,422 27,422 54,844 175,000 229,844
2030 22,500 22,500 45,000 185,000 230,000
2031 17,297 17,297 34,594 195,000 229,594
2032 11,812 11,813 23,625 205,000 228,625
2033 6,047 6,047 12,094 215,000 227,094
TOTALS 1,246,303 1,246,303 2,492,606 2,970,000 5,462,606
63
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NO 1'ES TO BASIC FINANCIAL STATEMENTS
(Continued)
2001A -1 Tax Allocation Bonds. 2001A -E Tax Allocation Bonds. 2001B -1 Subordinate
Lien Tax Allocation Bonds and 2001B -E Subordinate Lien Tax Allocation Bonds.
(Continued)
The annual payment amounts required to retire the (1984 Project) 2001B -E bonds
outstanding at June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year Anril 1 October 1 Interest Anril 1 debt Service
2010 30,696 30,695 61,391 25,000 86,391
2011 30,118 30,117 60,235 25,000 85,235
2012 29,530 29,530 59,060 25,000 84,060
2013 28,905 28,905 57,810 25,000 82,810
2014 28,202 28,202 56,404 30,000 86,404
2015 27,358 27,358 54,716 30,000 84,716
2016 26,514 26,515 53,029 30,000 83,029
2017 25,671 25,670 51,341 35,000 86,341
2018 24,686 24,687 49,373 35,000 84,373
2019 23,702 23,702 47,404 35,000 82,404
2020 22,718 22,717 45,435 40,000 85,435
2021 21,593 21,592 43,185 40,000 83,185
2022 20,468 20,467 40,935 45,000 85,935
2023 19,202 19,202 38,404 45,000 83,404
2024 17,936 17,937 35,873 50,000 85,873
2025 16,530 16,530 33,060 50,000 83,060
2026 15,105 15,105 30,210 55,000 85,210
2027 13,537 13,538 27,075 55,000 82,075
2028 11,970 11,970 23,940 60,000 83,940
2029 10,260 10,260 20,520 65,000 85,520
2030 8,407 8,408 16,815 70,000 86,815
2031 6,412 6,413 12,825 70,000 82,825
2032 4,417 4,418 8,835 75,000 83,835
2033 2,280 2,280 4,560 80,000 84,560
TOTALS 466,217 466,218 932,435 1,095,000 2,027,435
64
(61 Long -term Liabilities, (Continued'
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2002A Subordinate Lien Tax Allocation Bonds
On January 1, 2002, the Redevelopment Agency of the City of Rancho Mirage issued
$7,895,000 Subordinate Lien Tax Allocation Bonds, Series 2002A. The 2002A bonds
were issued for the purpose of financing certain improvements in the Whitewater Project
Area of the Agency, advance refund $6,730,000 of the outstanding 1992A tax allocation
bonds, purchase a debt service reserve surety bond for the bonds, and to pay the cost of
issuing the bonds. The proceeds used to advance refund the 1992A series were used to
purchase U.S government securities. Those securities were placed in an irrevocable trust
with an escrow agent to provide for all future debt service payments on the 1992A series.
Payment of principal, premium, if any, and interest on the series 2002A bonds is
subordinate to payment of principal, premium, if any and interest on the Whitewater
project 1994A bonds and the Whitewater project 1997A bonds, referred to as the "Senior
Lien Bonds.
The 2002A bonds have annual interest ranging from 3.00% to 4.80% and annual principal
installments ranging from $365,000 to $615,000 through April 1, 2019 and are subject to
mandatory redemption from a sinking fund account in amounts ranging from $515,000 to
$540,000 on April 1 beginning 2015 through 2016. The 2002A bonds are secured by the
surplus tax revenues of the Agency
The 2002A bond resolution and indentures require that a municipal bond insurance policy
be purchased which provides for the principal and interest on the bonds when due to the
extent that the trustee has not received payment therefore. As of June 30, 2009, the
reserve for the 2002A bond was held by the fiscal agent in the form of a surety bond.
65
(Cl Lona -term liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2002A Subordinate Lien Tax Allocation Bonds. (Continued)
The annual payment amounts required to retire the 2002A bonds outstanding at June 30,
2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year April 1 October 1 Interest April 1 Debt Service
2010 114,848 114,848 229,696 435,000 664,696
2011 106,148 106,148 212,296 450,000 662,296
2012 96,867 96,867 193,734 465,000 658,734
2013 87,276 87,277 174,553 475,000 649,553
2014 77,064 77,064 154,128 495,000 649,128
2015 66,174 66,174 132,348 515,000 647,348
2016 54,329 54,329 108,658 540,000 648,658
2017 41,909 41,909 83,818 565,000 648,818
2018 28,773 28,772 57,545 590,000 647,545
2019 14,760 14,760 29,520 615,000 644,520
TOTALS
688,148 688,148 1,376,296 5,145,000 6,521,296
2003 A -1 Subordinate Lien Tax Allocation Bonds. 2003 A -E Subordinate Lien Tax
Allocation Bonds, and 2003 A -T Subordinate Lien Tax Allocation Bonds
On November 19, 2003, the Redevelopment Agency of the City of Rancho Mirage issued
$1,074,378 of Subordinate Lien Tax Allocation Bonds, Series 2003 A -1, $5,140,000 of
Subordinate Lien Tax Allocation Bonds, Series 2003 A -E, and $1,180,000 of Subordinate
Lien Tax Allocation Bonds, Series 2003 A -T The bonds were issued by the Agency for
the purpose of financing certain improvements in the Whitewater Redevelopment Project
Area, (or, in the case of the Series 2003 A -E Bonds, funding a funding an escrow for
future improvements in the project area), funding a reserve account for the bonds, and
paying the costs of issuing the bonds. Payment of principal, premium, if any, and interest
on the bonds is subordinate to payment of principal, premium, if any, and interest on the
Senior Lien Bonds.
66
(6) Long -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2003 A -1 Subordinate Lien Tax Allocation Bonds. 2003 A -E Subordinate Lien Tax
Allocation Bonds, and 2003 A -T Subordinate Lien Tax Allocation Bonds. (Continued)
The Series 2003 A -E Bonds have annual interest ranging from 2.00% to 4.25% and
annual principal installments ranging from $215,000 to $300,000 through April 2012 and
are subject to redemption prior to maturity The bonds are secured by an irrevocable
pledge of the surplus tax revenues of the agency In addition, the 2003 A -E bonds are also
secured by amounts on deposit in the escrow fund as provided in the indenture. The 2003
A -1 Bonds are capital appreciation bonds, issued in an amount of $1,074,377 and have a
maturity value of $3,340,000 and mature April 1, 2025, and are not subject to redemption
prior to maturity The bonds are secured by an irrevocable pledge of the surplus tax
revenues of the agency
The series 2003 A -T bonds are capital appreciation bonds and are subject to redemption
prior to maturity $140,000 4.90% term series 2003 A -T bonds are due April 1, 2013.
$1,040,000 5 76% term series 2003 A -T bonds are April 1, 2004 The bonds are secured
by an irrevocable pledge of the surplus tax revenues of the agency As of June 30, 2009,
the series 2003 reserve was held by the fiscal agent in the form of a surety bond.
67
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NO 1'ES TO BASIC FINANCIAL STATEMENTS
(Continued)
2003A -1 Tax Allocation Bonds. 2003A -T Tax Allocation Bonds, 2003A -E Tax
Allocation Bonds. 2003B Subordinate Lien Tax Allocation Bonds. (Continued)
The annual payment amounts required to retire the Whitewater 2003 A -1 bonds
outstanding as of June 30, 2009 are as follows:
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Total accreted value
Less future accretion
68
Accreted Value
3.340.000
1340.000
(1.913.853)
Si 426.147
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NO 1'ES TO BASIC FINANCIAL STATEMENTS
(Continued)
2003 A -1 Subordinate Lien Tax Allocation Bonds. 2003 A -E Subordinate Lien Tax
Allocation Bonds. and 2003 A -T Subordinate Lien Tax Allocation Bonds. (Continued)
The annual payment amounts required to retire the (Whitewater) 2003 A -E Subordinate
Lien Tax Allocation bonds outstanding as of June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year April 1 October 1 Interest April 1 Debt Service
2010 94,066 94,065 188,131 225,000 413,131
2011 90,691 90,690 181,381 230,000 411,381
2012 86,953 86,953 173,906 245,000 418,906
2013 82,513 82,512 165,025 250,000 415,025
2014 77,825 77,825 155,650 260,000 415,650
2015 72,788 72,787 145,575 270,000 415,575
2016 67,388 67,387 134,775 280,000 414,775
2017 61,612 61,613 123,225 290,000 413,225
2018 55,631 55,632 111,263 300,000 411,263
2019 49,256 49,257 98,513 315,000 413,513
2020 41,972 41,972 83,944 335,000 418,944
2021 34,225 34,225 68,450 345,000 413,450
2022 26,247 26,247 52,494 360,000 412,494
2023 17,922 17,922 35,844 380,000 415,844
2024 9,134 9,135 18,269 395,000 413,269
TOTALS 868,223 868,222 1,736,445 4,480,000 6,216,445
69
(6) Long-term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2003 A -1 Subordinate Lien Tax Allocation Bonds. 2003 A -E Subordinate Lien Tax
Allocation Bonds. and 2003 A -T Subordinate Lien Tax Allocation Bonds. (Continued)
The annual payment amounts required to retire the (Whitewater) 2003 A -T Subordinate
Lien Tax Allocation bonds outstanding as of June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year April 1 October 1 Interest April 1 Debt Service
2010 31,667 31,667 63,334 15,000 78,334
2011 31,299 31,300 62,599 20,000 82,599
2012 30,810 30,809 61,619 15,000 76,619
2013 30,442 30,442 60,884 20,000 80,884
2014 29,952 29,952 59,904 15,000 74,904
2015 29,520 29,520 59,040 20,000 79,040
2016 28,944 28,944 57,888 20,000 77,888
2017 28,368 28,368 56,736 20,000 76,736
2018 27 792 27,792 55,584 25,000 80,584
2019 27,072 27,072 54,144 30,000 84,144
2020 26,208 26,208 52,416 55,000 107,416
2021 24,624 24,624 49,248 70,000 119,248
2022 22,608 22,608 45,216 75,000 120,216
2023 20,448 20,448 40,896 75,000 115,896
2024 18,288 18,288 36,576 635,000 671,576
TOTALS 408,042 408,042 816,084 1,110,000 1,926,084
70
(6) Long -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2003 A Tax Allocation Housing Bonds
On November 19, 2003, the Redevelopment Agency of the City of Rancho Mirage issued
$34,565,000 of Tax Allocation Housing Bonds, Series 2003 A. The bonds were issued by
the Agency for the purpose of financing certain improvements to the supply of low and
moderate income housing in, or otherwise benefiting, the Whitewater Redevelopment
Project and the Redevelopment Plan-1984 Project, purchasing a debt service reserve fund
surety bond for the Bonds, and paying the costs of issuing the bonds.
The $21,085,000 serial bonds have annual interest ranging from 2.00% to 5.25% and
annual principal installments ranging from $1,025,000 to $1,770,000. The $5,850,000, 4
5/8% term bonds are due April 1, 2024 The $7,630,000 5.00% term bonds are due
April 1, 2033 The bonds are subject to optional and mandatory redemption prior to
maturity The Bonds are secured by an irrevocable pledge of the Housing Tax Revenues.
The 2003A bond resolution and indentures require that a municipal bond insurance policy
be purchased which provides for the principal and interest on the bonds when due to the
extent that the trustee has not received payment therefore. As of June 30, 2009, the
reserve for the 2003A bond was held by the fiscal agent in the form of a surety bond.
71
(6) Long -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2003 A Tax Allocation Housing Bonds. (Continued)
The annual payment amounts required to retire the 2003A Housing Tax Allocation bonds
outstanding as of June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year Anril 1 October 1 Interest April 1 Debt Service
2010 688,978 688,978 1,377,956 1,135,000 2,512,956
2011 671,953 671,953 1,343,906 1,170,000 2,513,906
2012 651,478 651,478 1,302,956 1,210,000 2,512,956
2013 630,303 630,303 1,260,606 1,255,000 2,515,606
2014 606,772 606,772 1,213,544 1,300,000 2,513,544
2015 582,397 582,397 1,164,794 1,350,000 2,514,794
2016 556,241 556,240 1,112,481 1,400,000 2,512,481
2017 528,241 528,240 1,056,481 1,455,000 2,511,481
2018 498,231 498,232 996,463 1,515,000 2,511,463
2019 458,463 458,462 916,925 1,595,000 2,511,925
2020 416,594 416,594 833,188 1,680,000 2,513,188
2021 372,494 372,494 744,988 1,770,000 2,514,988
2022 326,031 326,032 652,063 1,860,000 2,512,063
2023 283,019 283,019 566,038 1,950,000 2,516,038
2024 237,925 237,925 475,850 2,040,000 2,515,850
2025 190,750 190,750 381,500 690,000 1,071,500
2026 173,500 173,500 347,000 725,000 1,072,000
2027 155,375 155,375 310,750 765,000 1,075,750
2028 136,250 136,250 272,500 800,000 1,072,500
2029 116,250 116,250 232,500 840,000 1,072,500
2030 95,250 95,250 190,500 885,000 1,075,500
2031 73,125 73,125 146,250 925,000 1,071,250
2032 50,000 50,000 100,000 975,000 1,075,000
2033 25,625 25,625 51,250 1,025,000 1,076,250
TOTALS 8,525,245 8,525,244 17,050,489 30,315,000 47,365,489
72
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2003A -1 Tax Allocation Bonds. 2003A -T Tax Allocation Bonds. 2003A -E Tax
Allocation Bonds. 2003B Subordinate Lien Tax Allocation Bonds
On November 19, 2003, the Redevelopment Agency of the City of Rancho Mirage issued
$1,456,027 of Tax Allocation Bonds, Series 2003A -1, $4,540,000 of Tax Allocation
Bonds, Series 2003A -T, $17,845,000 of Tax Allocation Bonds, Series 2003A -E, and
$1,960,000 of Subordinate Lien Tax Allocation Bonds, Series 2003B. The Series 2003A
Bonds were issued by the Agency for the purpose of financing certain improvements in
the Redevelopment Plan- 1984 Project (the "Project Area (or, in the case of the Series
2003A -E Bonds, funding an escrow for future improvements in the project area), and
paying the costs of issuing the Series 2003A Bonds. The Series 2003B Bonds were issued
by the Agency for the purpose of funding an escrow for future improvements in the
project area, funding a reserve account for the Series 2003B Bonds upon release of funds
from escrow, and paying the costs of issuing the Series 2003B Bonds. Payment of
principal, premium, if any, and interest on the Series 2003B Bonds is subordinate to the
payment of principal, premium, if any, and interest on the Series 2003A Bonds and
certain other outstanding obligations of the Agency
The $5,225,000 Series 2003A -E Serial Bonds have annual interest ranging from 2.00% to
4.25% and annual principal payments ranging from $365,000 to $530,000. In addition,
$3,685,000 4 5/8% Term Series 2003A -E Bonds are due April 1, 2024, $3,090,000
4 75% Term Series 2003A -E Bonds are due April 1, 2028, and $5,845,000 4 75% Term
Series 2003A -E Bonds are due April 1, 2034 The bonds are subject to redemption prior
to maturity
The Series 2003A -1 Bonds are capital appreciation bonds. The bonds are not subject to
redemption prior to maturity $749,033 of the series 2003A -1 Bonds mature April 1, 2034
at an accreted value of $3,940,000 and $706,994 of the series 2003A -1 Bonds mature
April 1, 2035 at an accreted value of $3,940,000.
The Series 2003A -T Term Bonds have annual interest ranging from 3.78% to 5.86% and
principal amounts ranging from $305,000 to $2,030,000.
The $450,000 Series 2003B Serial Bonds have annual interest ranging from 3.00% to
5.00% and annual principal payments ranging from $35,000 to $45,000. In addition,
$280,000 5.25% Term Series 2003B Bonds are due April 1, 2023, $355,000 5 3/8% Term
Series 2003B Bonds are due April 1, 2028, and $875,000 5.50% Term Series 2003B
Bonds are due April 1, 2034
73
(6) Lon e -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2003A -1 Tax Allocation Bonds. 2003A -T Tax Allocation Bonds, 2003A -E Tax
Allocation Bonds. 2003B Subordinate Lien Tax Allocation Bonds. (Continued)
The Series 2003A Bonds are secured by the pledged tax revenues of the Agency and from
amounts on deposit in the reserve account established under the Senior Indenture. In
addition, the Series 2003A -E Bonds are secured by amounts on deposit in the Escrow
Fund established under the Senior Indenture (the "2003 Escrow Fund The Series
2003B Bonds are secured by the surplus tax revenues of the Agency and from amounts on
deposit in the reserve account established under the Subordinate Indenture. In addition,
the Series 2003B Bonds are secured by amounts on deposit in the escrow fund established
under the Subordinate Indenture (the "2003B Escrow Fund
The 2003A Supplemental Indenture requires that amounts on deposit in bond reserve
account, when added to amount on deposit in the Senior Reserve Account established
under the Senior Indenture equal the Reserve Requirement which is the lesser of 10% of
the bond proceeds of each series of bonds outstanding, 125% of Average Annual Debt
Service or Maximum Annual debt service on all Series of Bonds. The Senior Reserve
Account has cash and debt service reserve surety bonds equal to or exceeding the Reserve
Requirement for all bonds outstanding including the Series 2003A. No additional deposit
is required for the Series 2003B bonds reserve fund since these bond proceeds are in
escrow and therefore excluded from the Reserve Requirement.
74
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NO 1 TO BASIC FINANCIAL STATEMENTS
(Continued)
2003A -1 Tax Allocation Bonds. 2003A -T Tax Allocation Bonds, 2003A -E Tax
Allocation Bonds. 2003B Subordinate Lien Tax Allocation Bonds. (Continued)
The annual payment amounts required to retire the (the 1984 Project) 2003 A -E Tax
Allocation bonds outstanding as of June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year Anril 1 October 1 Interest Anril 1 Debt Service
2010 375,035 375,034 750,069 395,000 1,145,069
2011 369,110 369,109 738,219 405,000 1,143,219
2012 362,528 362,528 725,056 420,000 1,145,056
2013 355,178 355,178 710,356 435,000 1,145,356
2014 347,022 347,022 694,044 450,000 1,144,044
2015 338,303 338,303 676,606 465,000 1,141,606
2016 329,003 329,003 658,006 490,000 1,148,006
2017 319,203 319,203 638,406 510,000 1,148,406
2018 308,684 308,685 617,369 530,000 1,147,369
2019 297,422 297,422 594,844 550,000 1,144,844
2020 284,703 284,703 569,406 570,000 1,139,406
2021 271,522 271,522 543,044 600,000 1,143,044
2022 257,647 257,647 515,294 625,000 1,140,294
2023 243,194 243,194 486,388 655,000 1,141,388
2024 228,047 228,047 456,094 685,000 1,141,094
2025 212,206 212,207 424,413 715,000 1,139,413
2026 195,225 195,225 390,450 755,000 1,145,450
2027 177,294 177,294 354,588 790,000 1,144,588
2028 158,531 158,532 317,063 830,000 1,147,063
2029 138,819 138,819 277,638 865,000 1,142,638
2030 118,275 118,275 236,550 905,000 1,141,550
2031 96,781 96,782 193,563 950,000 1,143,563
2032 74,219 74,219 148,438 995,000 1,143,438
2033 50,588 50,587 101,175 1,040,000 1,141,175
2034 25,888 25,887 51,775 1,090,000 1,141,775
TOTALS 5,934,427 5,934,427 11,868,854 16,720,000 28,588,854
75
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2003A -1 Tax Allocation Bonds. 2003A -T Tax Allocation Bonds, 2003A -E Tax
Allocation Bonds, 2003B Subordinate Lien Tax Allocation Bonds. (Continued)
The annual payment amounts required to retire the (the 1984 Project) 2003 A -T Tax
Allocation bonds outstanding as of June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year Anril 1 October 1 Interest Anril 1 Debt Service
2010 118,110 118,109 236,219 85,000 321,219
2011 116,006 116,006 232,012 95,000 327,012
2012 113,655 113,654 227,309 95,000 322,309
2013 111,303 111,304 222,607 100,000 322,607
2014 108,783 108,783 217,566 105,000 322,566
2015 105,967 105,967 211,934 115,000 326,934
2016 102,833 102,834 205,667 115,000 320,667
2017 99,700 99,699 199,399 125,000 324,399
2018 96,293 96,294 192,587 125,000 317,587
2019 92,887 92,887 185,774 140,000 325,774
2020 88,855 88,855 177,710 145,000 322,710
2021 84,679 84,679 169,358 155,000 324,358
2022 80,215 80,215 160,430 165,000 325,430
2023 75,463 75,463 150,926 180,000 330,926
2024 70,279 70,279 140,558 180,000 320,558
2025 65,095 65,095 130,190 195,000 325,190
2026 59,479 59,479 118,958 210,000 328,958
2027 53,326 53,326 106,652 220,000 326,652
2028 46,880 46,880 93,760 230,000 323,760
2029 40,141 40,141 80,282 245,000 325,282
2030 32,963 32,962 65,925 265,000 330,925
2031 25,198 25,198 50,396 265,000 315,396
2032 17,433 17,434 34,867 290,000 324,867
2033 8,937 8,936 17,873 305,000 322,873
TOTALS 1,814,480 1,814,479 3,628,959 4,150,000 7,778,959
76
(6) Long -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2003A -1 Tax Allocation Bonds. 2003A -T Tax Allocation Bonds. 2003A -E Tax
Allocation Bonds. 2003B Subordinate Lien Tax Allocation Bonds. (Continued)
The annual payment amounts required to retire the (1984 Project) 2003 B bonds
outstanding as of June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year April 1 October 1 Interest April 1 Debt Service
2010 48,838 48,837 97,675 30,000 127,675
2011 48,275 48,275 96,550 35,000 131,550
2012 47,553 47,553 95,106 35,000 130,106
2013 46,809 46,810 93,619 35,000 128,619
2014 46,022 46,022 92,044 40,000 132,044
2015 45,097 45,097 90,194 45,000 135,194
2016 44,028 44,028 88,056 40,000 128,056
2017 43,053 43,053 86,106 40,000 126,106
2018 42,078 42,078 84,156 45,000 129,156
2019 40,953 40,953 81,906 50,000 131,906
2020 39,641 39,640 79,281 55,000 134,281
2021 38,197 38,197 76,394 60,000 136,394
2022 36,622 36,622 73,244 55,000 128,244
2023 35,178 35,178 70,356 60,000 130,356
2024 33,603 33,603 67,206 65,000 132,206
2025 31,856 31,857 63,713 70,000 133,713
2026 29,975 29,975 59,950 70,000 129,950
2027 28,094 28,094 56,188 75,000 131,188
2028 26,078 26,078 52,156 75,000 127,156
2029 24,063 24,062 48,125 80,000 128,125
2030 21,863 21,862 43,725 80,000 123,725
2031 19,662 19,663 39,325 95,000 134,325
2032 17,050 17,050 34,100 95,000 129,100
2033 14,437 14,438 28,875 105,000 133,875
2034 11,550 11,550 23,100 420,000 443,100
TOTALS 860,575 860,575 1,721,150 1,855,000 3,576,150
77
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2003A -1 Tax Allocation Bonds. 2003A -T Tax Allocation Bonds, 2003A -E Tax
Allocation Bonds. 2003B Subordinate Lien Tax Allocation Bonds. (Continued)
The annual payment amounts required to retire the (1984 Project) 2003 A -1 bonds
outstanding as of June 30, 2009 are as follows:
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Total accreted value
Less future accretion
78
Accreted Value
3,940,000
3.940.000
7.880.000
(5.930.685)
Si 949315
(6) Lone -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2006 A Whitewater Tax Allocation Refunding Bonds
On April 20, 2006, the Redevelopment Agency of the City of Rancho Mirage issued
$24,910,000 Tax Allocation Refunding Bonds, Series 2006A (Whitewater Sub Area).
Proceeds of the Bonds were used to pay the costs of issuing the Bonds, to purchase a debt
service reserve fund surety bond for the Bonds and to refund the Agency's Whitewater
Redevelopment Project, Tax Allocation Refunding Bonds, Series 1994A, originally
issued in the principal amount of $23,090,000, of which $18,360,000 is currently
outstanding, the Agency's Whitewater Redevelopment Project Tax Allocation Parity
Bonds, 1997A, originally issued in the principal amount of $4,850,000, of which
$3,930,000 is currently outstanding, and the Agency's Whitewater Redevelopment
Project Subordinate Tax Allocation Bonds, Series 1997B, originally issued in the
principal amount of $3,575,000, of which $2,900,000 is currently outstanding.
The prior Bonds were issued by the Agency to finance and refinance certain
improvements in, or benefiting, the Whitewater Sub -Area of its Merged Redevelopment
Project.
The Bonds are limited obligation of the Agency payable solely from and secured by the
Surplus Tax Revenues to be derived from the Sub -Area, and from the amounts on deposit
in certain funds as described herein. Upon issuance of the Bonds, there will no longer be
outstanding any indebtedness with a lien on the Surplus Tax Revenues senior to the lien
of the Bonds.
The Whitewater Sub -Area encompasses approximately 5,076 acres, or about 34% of the
total incorporated area of the City Approximately 66% of the Whitewater Sub -Area
consists of steep mountain slopes and is currently not considered to be developable.
Beginning April 1, 2007, the 2006A Bonds are due in annual installments of $890,000 to
$2,480,000 through April 1, 2024 Interest ranging from 3.5% to 5% is due in semi -annul
installment on April 1 and October 1 of each year. The reserve requirement is held by the
fiscal agent in the form of a surety bond.
79
(6) Long -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
The annual payment amounts for Tax Allocation Refunding Bonds, Series 2006A (Whitewater)
outstanding as of June 30, 2009 are as follows:
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Year Anril 1 October 1 Interest Anril 1 Debt Service
2010 548,131 548,132 1,096,263 885,000 1,981,263
2011 530,431 530,432 1,060,863 920,000 1,980,863
2012 512,032 512,031 1,024,063 960,000 1,984,063
2013 488,032 488,031 976,063 1,015,000 1,991,063
2014 462,657 462,656 925,313 1,075,000 2,000,313
2015 437,125 437,125 874,250 1,125,000 1,999,250
2016 409,000 409,000 818,000 1,180,000 1,998,000
2017 379,500 379,500 759,000 1,235,000 1,994,000
2018 348,625 348,625 697,250 1,295,000 1,992,250
2019 316,250 316,250 632,500 1,365,000 1,997,500
2020 282,125 282,125 564,250 2,045,000 2,609,250
2021 231,000 231,000 462,000 2,145,000 2,607,000
2022 177,375 177,375 354,750 2,250,000 2,604,750
2023 121,125 121,125 242,250 2,365,000 2,607,250
2024 62,000 62,000 124,000 2,480,000 2,604,000
TOTALS 5,305,408 5,305,407 10,610,815 22 340,000 32,950,815
80
(6) Long -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
2006 A Northside Tax Allocation Refunding Bonds
On April 20, 2006 the Redevelopment Agency of the City of Rancho Mirage issued
$24,210,000 Tax Allocation Refunding Bonds, Series 2006A (Northside Sub Area). The
proceeds of the Bonds were used to pay the costs of issuing the Bonds, to purchase a debt
service reserve fund surety bond for the Bonds and to refund the Agency's
Redevelopment Plan -1984 Project, Tax Allocation Refunding Bonds, Series 1994A,
originally issued in the principal amount of $16,930,000, of which $14,945,000 is
currently outstanding, and the Agency's Redevelopment Plan -1984 Project, Tax
Allocation Bond Series, 1999A, originally issued in the principal amount of $8,680,000,
of which $8,590,000 is currently outstanding.
The prior Bonds were issued by the Agency to finance and refinance certain
improvements in, or benefiting, the Northside Sub -Area of its Merged Redevelopment
Project.
The Northside Sub -Area encompasses approximately 4,717 acres, or about 30% of the
total incorporated area of the City The entire Northside Sub -Area consists of developed
or developable land and is primarily residential in character.
Beginning April 1, 2007, the 2006A Bonds are due in annual installments of $435,000 to
$1,715,000 through April 1, 2033. Interest ranging from 3.5% to 5.0% is due in semi
annul installments on April 1 and October 1 of each year. The reserve requirement is
held by the fiscal agent in the form of a surety bond.
81
(6) Long -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
The annual payment amounts for Tax Allocation Refunding Bonds, Series 2006A
(Northside Sub -Area) outstanding as of June 30, 2009 are as follows:
Fiscal Interest Interest Due
Year Dne April 1 October 1
82
Total interest
Principal Due
April
Total Annual
Debt Service
2010 541,122 541,122 1,082,244 365,000 1,447,244
2011 534,278 534,278 1,068,556 385,000 1,453,556
2012 527,300 527,300 1,054,600 395,000 1,449,600
2013 519,400 519,400 1,038,800 410,000 1,448,800
2014 511,200 511,200 1,022,400 435,000 1,457,400
2015 500,869 500,869 1,001,738 450,000 1,451,738
2016 490,744 490,744 981,488 465,000 1,446,488
2017 479,119 479,119 958,238 495,000 1,453,238
2018 467,363 467,362 934,725 855,000 1,789,725
2019 445,988 445,987 891,975 890,000 1,781,975
2020 426,519 426,519 853,038 940,000 1,793,038
2021 405,956 405,957 811,913 970,000 1,781,913
2022 384,131 384,132 768,263 1,020,000 1,788,263
2023 359,906 359,907 719,813 1,065,000 1,784,813
2024 334,613 334,612 669,225 1,115,000 1,784,225
2025 308,131 308,132 616,263 1,170,000 1,786,263
2026 281,806 281,807 563,613 1,215,000 1,778,613
2027 254,469 254,469 508,938 1,275,000 1,783,938
2028 222,594 222,594 445,188 1,335,000 1,780,188
2029 189,219 189,219 378,438 1,400,000 1,778,438
2030 154,219 154,219 308,438 1,490,000 1,798,438
2031 116,969 116,969 233,938 1,570,000 1,803,938
2032 79,682 79,681 159,363 1,640,000 1,799,363
2033 40,732 40,731 81,463 1,715,000 1,796,463
8,576,329 8,576,329 17,152,658 23,065,000 40,217,658
(6) Long -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STAIEMENTS
(Continued)
2008 A Subordinate Lien Tax Allocation Bonds
On July 30, 2008 the Redevelopment Agency of the City of Rancho Mirage issued
$22,040,000 Subordinate Lien Tax Allocation Bonds, Series 2008A (Northside Sub
Area). The proceeds of the Bonds were used to pay the costs of issuing the Bonds, to fund
a reserve account for the Bonds, and to finance certain improvements in its Merged
Redevelopment Project.
The Sub -Area encompasses approximately 4,717 acres, or about 30% of the total
incorporated area of the City The entire Sub -Area consists of developed or developable
land and is primarily residential in character
Beginning April 1, 2009, the 2008A Bonds are due in annual installments of $460,000 to
$1,350,000 through April 1, 2035 Interest ranging from 3.0% to 4 75% is due in semi
annul installments on April 1 and October 1 of each year. The amount required for the
bond reserve is $1,492,544 As of June 30, 2009, the reserve that was held by the fiscal
agent was $1,552,608.
83
(6) Long -term Liabilities. (Continued)
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
The annual payment amounts required to retire the 2008A bonds
2009 are as follows:
Fiscal
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
3032
3033
2034
2035
Interest Interest Due
Due Anril 1 October 1
513,972
507,072
497,672
487,872
477,672
467,172
456,272
444,309
431,666
417,716
403,091
387,903
371,160
353,585
334,210
313,835
292,585
270,085
245,869
220,372
193,594
164,719
134,531
102,638
69,038
35,438
513,972
507,072
497,672
487,872
477,672
467,172
456,272
444,310
431,665
417,715
403,090
387,903
371,159
353,584
334,209
313,834
292,584
270,084
245,868
220,372
193,593
164,718
134,531
102,637
69,037
35,437
Total Interest
1,027,944
1,014,144
995,344
975,744
955,344
934,344
912,544
888,619
863,331
835,431
806,181
775,806
742,319
707,169
668,419
627,669
585,169
540,169
491,737
440,744
387,187
329,437
269,062
205,275
138,075
70,875
outstanding at June 30,
Principal Due
Anril 1
460,000
470,000
490,000
510,000
525,000
545,000
580,000
595,000
620,000
650,000
675,000
705,000
740,000
775,000
815,000
850,000
900,000
945,000
995,000
1,045,000
1,100,000
1,150,000
1,215,000
1,280,000
1,280,000
1,350,000
Total Annual
Debt Service
1,487,944
1,484,144
1,485,344
1,485,744
1,480,344
1,479,344
1,492,544
1,483,619
1,483,331
1,485,431
1,481,181
1,480,806
1,482,319
1,482,169
1,483,419
1,477,669
1,485,169
1,485,169
1,486,737
1,485,744
1,487,187
1,479,437
1,484,062
1,485,275
1,418,075
1,420,875
8,594,048 8,594,034 17,188,082 21,265,000 38,453,082
84
(61 Lone -term Liabilities. (Continued)
(71 Pledged Revenues
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Redevelonment Agency Reimbursement for Cost of Library
In January 2006, the new Library opened at a cost of $19,159,628 and was paid for from
bond proceeds of the Redevelopment Agency's Northside Project Area. Based on
analysis by City staff, 21.3% of the cost of the Library is attributable to new development.
In September 2004, the City's Development Impact Fee went into effect, pursuant to
Government Code Section 66001, to mitigate the impact of new development on the
City's public facilities and infrastructure. One of the components of the Fee is the
Library Improvements and Facilities Fee (Library Fee). The purpose of this specific fee
component is to provide funding for the acquisition of land, construction and equipping
of a new Library
Based on action taken by the City Council on May 18, 2006, 21.3% of the final cost of
the Library or $4,081,000 is to be reimbursed to the Redevelopment Agency by the
Library Fee. By June 30, 2009, $613,690 was reimbursed to the Northside Capital
Projects Fund leaving a balance of $3,467,310 that will be reimbursed from future
Library Fee revenues. No liability for the remaining balance has been recorded in the
financial statements because payment is derived from future revenues.
The City and its component units have a number of debt issuances outstanding that are
collateralized by the pledging of certain revenues. The amount and term of the remainder
of these commitments are indicated in the debt service to maturity tables presented in the
accompanying notes. The purposes for which the proceeds of the related debt issuances
were utilized are disclosed in the debt descriptions in the accompanying notes. For the
current year, debt service payments as a percentage of the pledged gross revenue (or net
of certain expenses where so required by the debt agreement) are indicated in the table
below These percentages also approximate the relationship of debt service to pledged
revenue for the remainder of the term of the commitment:
Description of Annual Amount of
Pledged Revenue Pledged Revenue
Tax increment revenues $35,571,825
85
Annual Debt
Service Payments
(of all debt secured
by this revenue)
Debt Service
as a Percentage of
Pledged Revenue
11,678,947 33%
CITY OF RANCHO MIRAGE
NO TES TO BASIC FINANCIAL STATEMENTS
(Continued)
(81 Debt Without Governmental Commitment
The City has issued a number of special assessment bonds under the State Improvement
Act of 1911 and 1915 These bonds are payable only from special assessment collections
from the property owners. The City is not obligated for repayment. The City is only
acting as an agent for the property owners and bondholders in collecting and forwarding
the special assessments toward bond debt service. The bonds are, therefore, not reported
as a liability in the accompanying financial statements. The amounts collected and held
by the City pending disbursement to the bondholders are accounted for in an agency fund.
Approximately $11,985,000 of these bonds are outstanding at June 30, 2009
On May 1, 2004, the Joint Powers Financing Authority "Authority), a component unit of
the City of Rancho Mirage, issued $76,880,000 of revenue bonds evidencing an interest
in payments to be made by the Eisenhower Medical Center (the "Corporation The
proceeds of the bonds were used by the Corporation to refund the Corporation's 2001A
Series and 2001B Series variable rate revenue bonds, finance the acquisition,
construction, improvement and equipping of health care facilities and pay the costs of
issuing the bonds. The Corporation's obligation to make its payments are secured by a
pledge of gross revenues of the hospital. The City and the Authority are not obligated in
any manner for repayment. Therefore, these bonds are not reported as a liability in the
accompanying financial statements.
On January 29, 1997, the Authority issued $95,000,000 in certificates of participation
evidencing an interest in payments to be made by the Corporation. The certificates of
participation were issued to refund $28,750,000 of the outstanding 1987 City of Rancho
Mirage Hospital Revenue certificates of participation, $33,175,000 of the outstanding
1992 City of Rancho Mirage Joint Powers Financing Authority certificates of
participation, certain other outstanding indebtedness of the Corporation and reimburse the
Corporation for expenditures for certain prior capital improvements and equipment, and
to finance certain capital projects of the Corporation facilities in Rancho Mirage. The
Corporation's obligation to make its payments is secured by a pledge of gross revenues of
the hospital. The City and the Authority are not obligated in any manner for repayment.
The certificates are payable only from the assets of the Corporation. Therefore, these
certificates are not reported as a liability in the accompanying financial statements.
(91 Participation in Risk Pool
The City is a member of Public Entity Risk Management Authority (PERMA), a joint
powers insurance authority formed under Section 990 of the California Government Code
for the purpose of jointly funding programs of insurance coverage for its members.
PERMA is comprised of twenty -six participating member agencies: eighteen cities, three
transit agencies and five special districts. The City participates in the liability, workers'
compensation, property and business auto physical damage insurance programs of
PERMA.
86
CITY OF RANCHO MIRAGE
NO 1'ES TO BASIC FINANCIAL STATEMENTS
(Continued)
(9) Participation in Risk Pool. (Continued)
The liability program provides coverage up to $50 million per occurrence for personal
injury, bodily injury, property damage and public officials' errors and omissions.
Effective July 1 2005, the City increased its self- insured retention from $50,000 to
$125,000 and participates in risk sharing pools for losses up to $1 million followed by
PERMA's membership in the CSAC Excess Insurance Authority (ETA) for $49 million
excess liability coverage.
The workers' compensation program provides $300 million per accident for workers'
compensation and $5 million each accident for employers' liability The City self- insures
up to a level of $250,000 per accident or employee and participates in a risk sharing pool
for losses up to $500,000 followed by PERMA's membership in the Local Agency
Workers' Compensation Excess Joint Powers Authority (LAWCX) for excess coverage to
the limits.
The property insurance program is group purchased under a master property insurance
policy with accumulated values from all participants effecting lower rates and broader
coverage for members. The program covers real property, business personal property,
inland marine coverage for special mobile equipment and business interruption.
Commercial property coverage is written on a replacement cost basis and all risk,
eliminating the traditional commercial "named peril" policy
The business auto physical damage insurance program is also group purchased under a
master insurance policy with accumulated values from all participants effecting lower
rates for members. Business auto physical damage coverage is written on an agreed
amount basis.
In addition to coverage provided by PERMA, the City also separately purchases coverage
for earthquake, public employee dishonesty and public officials and employment liability
Changes in the amount of claims payable for the past two fiscal years are as follows:
Current Year
Claims and
Beginning Changes in Claim Ending
Balance Estimates Payments Balance
2007 -2008 $288,025 40,117 (35,028) 293,114
2008 -2009 293,114 211,628 (60,155) 444,587
Claim payments represent disbursements from deposits held by PERMA on behalf of the
City None of the above programs of protection have had settlements or judgments that
exceeded pooled or insured coverage for the past 3 years.
87
(101 Required Disclosures
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Formal budgetary integration is not adopted for the Joint Powers Financing Authority
Debt Service Fund.
(111 Defined Benefit Pension Plan
The City of Rancho Mirage contributes to the California Public Employees Retirement
System (Ca1PERS), a cost sharing multiple- employer public employee defined benefit
pension plan. Ca1PERS provides retirement, disability benefits, and death benefits to plan
members and beneficiaries. CaIPERS acts as a common investment and administrative
agent for participating public entities within the State of California. Ca1PERS issues a
publicly available financial report that includes financial statements and required
supplementary information for the cost sharing plans that are administered by Ca1PERS.
Copies of Ca1PERS' annual financial report may be obtained from its executive office at
400 "P" Street, Sacramento, California 95814
Participants are required to contribute 8% of their annual covered salary The City
contributes 7% of the required 8% contribution on behalf of the employees. The
employees contribute the remaining 1 Benefit provisions and all other requirements
are established by state statute and town contract with employee bargaining groups.
For each of the fiscal years shown below, the City has contributed at the actuarially
determined rate provided by CalPERS' actuaries. Under GASB 27, an employer reports
an annual pension cost (APC) equal to the annual required contribution (ARC) plus an
adjustment for the cumulative difference between the APC and the employer's actual plan
contributions for the year. The cumulative difference is called the net pension obligation
(NPO). The ARC for the period July 1, 2008 to June 30, 2009 has been determined by an
actuarial valuation of the plan as of June 30, 2008. The City's covered payroll for PERS
was $7,007,459 for the year ended June 30, 2009, while the City's total payroll for all
employees was $7,713,635 during the same period. In order to calculate the dollar value
of the ARC for inclusion in financial statements prepared as of June 30, 2009, the
contribution rate is multiplied by the payroll of covered employees that were paid during
the period from July 1, 2008 to June 30, 2009
88
(11) Defined Benefit Pension Plan (Continued)
A summary of principle assumptions and methods used to determine the ARC is shown
below
Valuation Date
Actuarial Cost Method
Amortization Method
Average Remaining Period
Asset Valuation Method
Actuarial Assumptions
Investment Rate of Return
Projected Salary Increases
Initial plan unfunded liabilities are amortized over a closed period that depends on the
plan's date of entry into Ca1PERS risk pool. Subsequent plan amendments are amortized
as a level of pay over a closed 20 -year period. Gains and losses that occur in the
operation of the plan are amortized over a rolling 30 years period, which results in an
amortization of 10% of unamortized gains and losses each year If the plan's accrued
liability exceeds the actuarial value of plan assets, then the amortization period may not
be lower than the payment calculated over a 30 year amortization period. The City is part
of a risk pool established for plans containing less than 100 active members as of the
valuation date. In general, plans satisfying this criteria were combined into pools based on
their benefit formula and membership category
The Schedule of Funding Progress below shows the recent history of the risk pools'
actuarial value of assets, actuarial accrued liability, their relationship, and the relationship
of the unfunded accrued liability to payroll.
Fiscal
Year
6/30/07
6/30/08
6/30/09
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Inflation
Payroll Growth
Individual Salary Growth
THREE -YEAR TREND INFORMATION FOR CALPERS
Employer
Contribution
Rate
17.073%
17.057%
16.797%
June 30, 2008
Entry Age Actuarial Cost Method
Level Percent of Payroll
17 Years as of the Valuation Date
15 Year Smoothed Market
7 75% (net of administrative expenses)
3.25% to 14 45% depending on Age,
Service, and type of employment
3.00%
3.25%
A merit scale varying by duration of
employment coupled with an assumed
annual inflation component of 3.00%
and an annual production growth of
0.25%
Employer
Contribution
1,340,999
1,555,824
1,667,565
89
Net
Percentage Pension
Contributed Obligation
100%
100%
100%
(121 Other Post Employment Benefits
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
Effective July 1, 2008, the City changed its accounting for postemployment benefits other
than pensions to reflect the implementation of GASB No. 45.
Plan Description: The City administers a single employer defined benefit plan (Plan)
which provides health care (medical, dental, and vision) benefits to eligible members
under City Council Resolutions No. 89 -63 and No. 95 -26.
Effective December 7, 2000, four years of continued medical, dental and vision insurance
for the first four years of service plus six months for each subsequent year is provided by
the City for a Council member upon leaving the City Council. A Council member may
elect to continue participation as a member of the City's insurance plans under the
provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) by
making payments to the City for associated premium costs.
Effective July 1, 2000, continued medical, dental and vision insurance for retired
employees and their spouse /dependents was provided pursuant a Memorandum of
Understanding between the City and the Rancho Mirage Employees' Association.
For all covered employees with effective dates of retirement after December 7, 2000 and
a minimum of 5 -10 years of continuous service, the City contributes the actual cost of
insurance up to the amount contributed for active employees. These benefits with the City
will terminate upon reaching age 65, the current eligibility for Medicare.
Eligibility For employees first employed full -time by the City before July 1, 2005, are
eligible for retiree health benefits if they retire from the City 1) on or after age 55 with at
least 10 consecutive years of service; or 2) on or after age 63 with at least 5 consecutive
years of service; and are eligible for a PERS pension;. Membership of the plan consisted
of the following at June 30, 2008, the date of the latest actuarial valuation:
Active Retired Total
Under 65 79 4 83
65 over 6 2 8
Total 85 6 91
City's Funding Policy The contribution requirements of plan members and the City are
established and may be amended by City Council. The contribution required to be made
under City Council and labor agreement requirements is based on a pay -as- you -go basis
(i.e., as medical insurance premiums become due). For fiscal year 2008 -09, the City
contributed $241,801 to the plan, including $47,120 for current premiums. No employee
contributions are required to participate in the Plan.
The City makes voluntary contributions to the Ca1PERS trust. Ca1PERS publishes
separate financial statements conforming to GASB Statement No. 43 in separately issued
financial statements for the Ca1PERS OPEB Trust. Copies of PERS' annual financial
reports for its OPEB Trust may be obtained from its executive office at 400 "Q" Street,
Sacramento, California 95811
90
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(121 Other Post Emnlovment Benefits, (Continued)
Annual OPEB Cost and Net OPEB Obligation. The City's annual other postemployment
benefit (OPEB) cost (expense) is calculated based on the annual required contribution of
the employer (ARC), an amount actuarially determined in accordance with the parameters
of GASB Statement No. 45 The ARC represents a level of funding that, if paid on an
ongoing basis, is projected to cover normal cost each year and amortize any unfunded
actuarial liabilities (or funding excess) over a period not to exceed thirty years. The
following table shows the components of the City's annual OPEB cost for the year, the
amount actually contributed to the plan, and changes in the City's net OPEB obligation
for these benefits:
Annual required contribution
Interest on net OPEB obligation
Adjustments to annual required contributions
Annual OPEB cost (expense)
Contributions made (including premiums paid)
Increase in net OPEB obligation
Net OPEB obligation beginning of year
Net OPEB obligation -end of year
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the
plan, and the net OPEB obligation for 2009 and the two preceding years were as follows:
Percentage of
Annual Net
Fiscal Annual OPEB Cost OPEB
Year OPEB Cost Contributed Obligation
6/30/07 N/A N/A N/A
6/30/08 N/A N/A N/A
6/30/09 $241,801 100%
91
$241,801
241,801
(241.8011
CITY OF RANCHO MIRAGE
NO'1'ES TO BASIC FINANCIAL STA 1'EMENTS
(Continued)
(12) Other Post Employment Benefits. (Continued)
Funded Status and Funding Progress. Actuarial valuations of an ongoing plan involve
estimates of the value of reported amounts and assumptions about the probability of
occurrence of events far into the future. Examples include assumptions about future
employment, mortality, and the healthcare cost trend. Amounts determined regarding the
funded status of the plan and the annual required contributions of the employer are
subject to continual revision as actual results are compared with past expectations and
new estimates are made about the future. The schedule of funding progress presents
multi -year trend information about whether the actuarial value of plan assets is increasing
or decreasing over time relative to the actuarial accrued liabilities for the benefits.
Actuarial Methods and Assumptions. Projections of benefits for financial reporting
purposes are based on the substantive plan (the plan as understood by the employer and
the plan members) and include the types of benefits provided at the time of each valuation
and the historical pattern of sharing of benefit costs between employer and plan members
to that point. The actuarial methods and assumptions used include techniques that are
designed to reduce the effects of short-term volatility in actuarial accrued liabilities and
the actuarial assets, consistent with the long -term perspective of the calculations.
The actuarial cost method used for determining the benefit obligations is the Entry Age
Normal Actuarial Cost Method. The actuarial assumptions included a 7 75 percent
investment rate of return, which is the assumed rate of the expected long -term investment
returns on plan assets calculated based on the funded level of the plan at the valuation
date, and an annual healthcare cost trend rate of 5.5 percent initially, 10 percent in 2009-
10, then reduced by decrements of 2.0 per year to an ultimate rate of 5 percent after the
fourth year. The UAAL is being amortized as a level percentage of projected payroll over
30 years. It is assumed the City's payroll will increase 3.25% per year.
The funded status of the plan as of June 30, 2008, is presented below
SCHEDULE OF FUNDING PROGRESS
Actuarial
Accrued UAAL as a
Actuarial Liability Unfunded Percentage of
Actuarial Value of (AAL)- AAL Funded Covered Covered
Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll
Date (a) fin (b -a) (a/b) (cj (b -a) /c)
6/30/06 N/A N/A N/A N/A N/A N/A
6/30/07 N/A N/A N/A N/A N/A N/A
6/30/08 $0 1,636,598 1,636,598 0% 6,390,204 25.6%
92
(13) Deferred Compensation Plan
(14) Contingencies
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
The City maintains a deferred compensation plan under Section 457 of the Internal
Revenue Code for the benefits of its employees. In November 1999, the City
implemented the 401(a) deferred compensation plan, in addition to the 457 plan, of
saving pre -tax dollars for retirement. These plans allow the employees to defer or
postpone receipt of income. Such income deferral provides tax advantages and a savings
plan for the employees.
Employees can participate in both the 457 and 401(a) plans or in either one. The 457
plans permit a maximum annual contribution of $16,500 under 50 years old and $22,000
for 50 years and older. If one participates in both the 457 plan and a 401(a) plan, the
maximum that one can contribute on a pre -tax basis is $65,240. The City contributes $10
per pay period to either plan or the 401(a) plan if the employee participates in both plans.
All City employees are eligible for plan participation.
The City formally establishes trusts in accordance with Internal Revenue Code Section
457(g) for its deferred compensation plan in prior fiscal years. The trusts were established
to provide protection from the claims of the employer's general creditors. The deferred
compensation assets placed in the trust have been removed from the balance sheet.
Distributions are made upon the occurrence of the participant's termination, retirement,
death or unforeseen emergency, and in a manner in accordance with the election made by
the participant. All City employees are eligible for plan participation.
Various claims and suits have been filed against the City in the normal course of
business. Although the outcome of these matters is not presently determinable, in the
opinion of legal counsel, the resolution of these matters is not expected to have a material
adverse effect on the financial condition of the City
When adopting its budget for fiscal year 2009 -10, the State of California reflected in that
budget a shift of a significant portion of tax increment revenue from redevelopment
agencies to school districts for fiscal years 2009 -10 and 2010 -11. The California
Redevelopment Association has filed a lawsuit challenging the legality of this tax shift.
The outcome of that lawsuit is not certain at this time.
93
CITY OF RANCHO MIRAGE
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
(l 51 Restatement of Fund Balance/Net Assets
Beginning fund balance /net assets have been restated as follows:
Housing Whitewater Northside Non -major Statement
General Library Authority Capital Capital Governmental of
Fund Fund Fund Project Fund Project Fund Funds Activities
Fund balance /net assets
at June 30, 2008 74,602,827 2,424,383 23,967,950 8,488,358 37,007,219 15,210,406 195,093,237
Reclassification of workers'
compensation payments into
risk pool from expenditures
to cash deposits held with
insurance authority 306,885 62,373 22,398 6,482 6,482 7,442 412,062
Recording of interest earned
on deposits held with
insurance authority 67 456 67 456
Fund balance /net assets at
July 1, 2008, as restated 74 977161 2.486356 23.990 348 8 494 840 37 0 15212848 R 195 57
94